When management uses financial measures to determine the effect of bottlenecks and operational decisions, they are likely to be using:
A) activity-based costing.
B) throughput accounting.
C) total quality management.
D) financial evaluation.

Question

Quizplus · Accepted Answer

Throughput accounting focuses on identifying and managing bottlenecks in operations to improve overall throughput, which is defined as the rate at which the organization generates money through sales. It takes into account both financial and operational measures to evaluate the impact of decisions and actions on overall throughput. Therefore, when management uses financial measures to determine the effect of bottlenecks and operational decisions, they are likely using throughput accounting.

When Management Uses Financial Measures to Determine the Effect of Bottlenecks