Professional Documents
Culture Documents
4th Exam Topics - PDF
4th Exam Topics - PDF
CONSTRAINTS AND
THROUGHPUT
ACCOUNTING
LOLITA APATAN
The theory of constraints (TOC) is management
philosophy about focusing attention on the
constraints (bottlenecks) that limit organizational
achievements (such as maximization of profits) so
that throughput can be maximized.
Peeling and
Drying Packaging
Cutting
S B CB
$ $ $
Selling price per unit 120 110 130
Direct material cost per unit 60 70 85
Throughput 60 40 45
Time required on the bottleneck 5 4 3
resource (hours per unit)
Return per bottleneck resource $12 $10 $15
Ranking 2 3 1
Product No. of units Hrs per unit Total hrs T/put per hr Total t/put
CB 40,000 3 120,000 $15 $1,800,000
S 30,000 5 150,000 $12 $1,800,000
B 12,500 4 50,000 $10 $ 500,000
$4,100,000