DOI: 10.5937/jaes14-10895
This is an open access article distributed under the CC BY-NC-ND 4.0 terms and conditions.
Volume 14 article 389 pages: 351-360
The aim of the paper
is to compare the principles, information outputs and consequent managerial implications
of the variable costing method and throughput accounting, according to their
different perceptions of cost variability. These two approaches could give rise
to various product mix decisions and findings relating to effect on
profitability. The paper also provides a practical example of limitations
experienced on two production lines for certain items. Comparison is made
between these two approaches as to which elicits a relevant decision on production
mix. Both the variable costing method and throughput accounting represent very
similar methods based on variable costs that do not reflect fixed costs.
Variable costing methods examine costs that change in accordance with volume of
output. On the contrary, throughput accounting merely acknowledges total
variable costs, and focuses on limitations which exist in a given company.
This paper is one of the research outputs of the
project GA 14-21654P/P403 .Variability of cost groups and its projection in the
costing system in manufacturing enterprises. registered at the Czech Science
Foundation.
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