Difference between Conventional cost accounting and Throughput accounting


Conventional cost accounting 
Throughput accounting

Inventory is an asset. 
Inventory is not an asset. It is a result of unsynchronized manufacturing and is a barrier to making profit.
Costs can be classified either as direct or indirect.

Such classifications are no longer useful.

Product profitability can be determined by deducting a product cost from selling price.
Profitability is determined by the rate at which money is earned.

Profit can be increased by reducing cost elements.

Profit is a function of material cost, total factory cost and throughput.

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