ACCT 3130 Chapter 9 & 11

A phenomenon where the performance or capacity of an entire system is limited by a single or limited number of components or resources.

In a bottleneck situation,

• capacity >= production

• capacity <= production

• capacity = production

ONLY in a bottleneck situation, throughput margin =

• Revenue - DM:COGS

• Revenue

Opportunity Cost = Lost ____ ___

Describes methods to maximize operating income when faced with some bottleneck & some non-bottleneck operations.

Which measures does the Theory of Constraints define?

• Throughput Margin

• Investments

• Operating Costs

• Operating Income

The objective of the Theory of Constraints is to increase:

• Throughput Margin

• Investments

• Operating Costs

The objective of the Theory of Constraints is to decrease:

• Throughput Margin

• Investments

• Operating Costs

Under ____, a fixed portion of manufacturing overhead is absorbed into the cost of each unit of product.

• Absorption Costing

• Variable Costing

• Process Costing

Costs move directly with production volume.

• Absorption Costing

• Variable Costing

• Process Costing