engleski

THROUGHPUT ACCOUNTING: PROFIT-FOCUSED COST ACCOUNTING METHOD

In the contemporary business environment marked by uncertainty and numerous risks, managers and decision makers use various cost accounting methods. There are many reliable methods ; nevertheless, accounting scholars continually strive to improve the existing and devise new ones. Although Throughput Accounting has not yet become widespread, it is one of the contemporary cost accounting methods whose importance in decision making has been growing. Despite the many drawbacks, there is an increasing interest in its use as it focuses on increasing profits. The fact that the subject of the paper falls under the field of management accounting is a further indication that Throughput Accounting has become increasingly important in decision making. Given that this method has not yet been sufficiently explored in Croatian literature, the paper aims at presenting its basic concepts, characteristics, specificities and application. A historical overview of the development of Throughput Accounting is given in which the definition and the development of the method related to the Theory of Constraints are explained. The basic concept and the purpose of this method are described, followed by an example of its use, and main ratios. The purpose, advantages and disadvantages of the method are discussed in a separate chapter. The most important insights gained from investigating this contemporary cost accounting method are presented in the conclusion.

contemporary cost accounting methods ; Theory of Constraints ; Throughput Accounting

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