TOC: Cost Accounting
B: show that there have been big increases in throughput
D: use costing information over the past two months
A: keep the plant from being shut down
Click on the icons on the arrows to see assumptions and injections
C: follow the accounting rules of the company
D': follow the traditional costing procedures and use costing information over the past 12 months
In order to keep the plant from being shut down I must show that there have been big increases in throughput and in order to show that there have been big increases in throughput I must use costing information over the past two months. But, in order to keep the plant from being shut down I must also follow the accounting rules of the company and in order to follow the accounting rules of the company I must follow the traditional costing procedures and use costing information over the past 12 months. I can't both use costing information over the past two months and follow the traditional costing procedures and use costing information over the past 12 months.
| Relation | Assumption(s) | Injection(s) |
| D-D' | 1. Management is looking for one set of numbers to represent cost accounting. 2. They will be two completely different numbers | 1. Management could look at both numbers |
| B-D | 1. The information over the past two months are more representative of whats really going on 2. The plant is a lot different now than it was 12 months ago | 1. Compare current numbers to numbers 12 months ago |
| C-D' | 1. If not followed the responsible parties could be in deep trouble. 2. This is the way that costing has always been done | 2. The way that cost accounting is done could be changed |
| A-B | 1. Top management is basing its decisions on measures of throughput 2. If throughput is increased top management could see potential in the plant | 2. Find a way to show these increases in throughput to the right people |
| A-C | 1. Rules are there for a reason and must be followed 2. Because these accounting rules are compared to other companies using the same accounting rules | If explained correctly, top management may see where the idea of different costing is coming from and change the rules |