Alex and Ethan Frost

Not rated yet. Be the first who rates this item!

Alex and his team have been using the TOC method of determining the cost per product. Ethan Frost wants them to use the traditional cost accounting methods that they have always used

D: Use Johna's TOC methods
D': Use traditional cost accounting methods
B: Determine cost through Throughput, Inventory and Operational expenses
C: Determine cost through labor overhead and materials
A: Produce accurate cost per product
Click on the icons on the arrows to see assumptions and injections
In order to Produce accurate cost per product I must Determine cost through Throughput, Inventory and Operational expenses and in order to Determine cost through Throughput, Inventory and Operational expenses I must Use Johna's TOC methods. But, in order to Produce accurate cost per product I must also Determine cost through labor overhead and materials and in order to Determine cost through labor overhead and materials I must Use traditional cost accounting methods. I can't both Use Johna's TOC methods and Use traditional cost accounting methods.
RelationAssumption(s)Injection(s)
D-D'I cannot use both methodsI could keep two seperate accounting books
B-DThese are the elements that determin TOC accounting methods
C-D'These are the elements that make up traditional cost accountingThey can can make it appear that costs are higher than they really are
A-BThese are the methods that we have been using for the past 2 monthsWe are just rearranging where costs are incurred
A-CThis is the way that it has always been doneThis is not the way we have been tracking costs