Hazique

Steps to identify bottlenecks in throughput accounting

1. Identify the bottleneck resource i.e. determine the difference between the available resources and the required resources.

2. Calculate the throughput per unit and the throughput per bottleneck resource.

3. Rank the products using the throughput per bottleneck

4. Determine the optimum production plan calculating the profit if required using the throughput format.

Hazique

ADBot

SzeNi

thanks ya~
simplified my notes
>,<v

SzeNi

what about backflush accounting???

Hazique

Back-flush accounting
* the costing system related to JIT.
* focuses on output.
* makes accounting entries only when goods are completed.
* reduces number of entries and thereby saves time considerably.
* assigns costs to products that are sold & to units in ending inventory.

Example
Accounting entry when raw materials & components are purchased on credit:

Dr: RIP account
Cr: Payable account
(Purchase of raw materials & component on credit)

Hazique

Complete article on Backflush is available in student accountant of May 2004.

lyndseyd

anyone know where exam tips are?

jiesi27

Thanks for the summary