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Prepared by Diane Tanner University of North Florida

Throughput Costing. Prepared by Diane Tanner University of North Florida. What is Throughput Costing?. 2. An method of determining which costs are assigned as ‘ product’ costs An alternative to variable and absorption costing Also known as super-variable costing

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Prepared by Diane Tanner University of North Florida

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  1. Throughput Costing Prepared by Diane Tanner University of North Florida

  2. What is Throughput Costing? 2 • An method of determining which costs are assigned as ‘product’ costs • An alternative to variable and absorption costing • Also known as super-variable costing • Only direct materials are assigned to products • Direct labor and all manufacturing overhead costs are expensed when incurred

  3. Rationale • Some managers take the view that only direct materials are truly variable and are the only costs that should be inventoried

  4. Combinations • Can be combined with • Actual costing • Normal costing • Standard costing

  5. The End

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