TOC: Cost Accounting

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
A-B:Assumption(s)Injection(s)
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
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.

RelationAssumption(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-D1. 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-B1. 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-C1. 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