New study reveals how cost accounting methods impact profitability decisions.
The article compares two methods, variable costing and throughput accounting, to see how they affect decisions about what products to make and how profitable a company is. Variable costing looks at costs that change with how much a company produces, while throughput accounting only considers total variable costs. The study shows that these methods can lead to different choices about what to produce, and that both focus on variable costs without including fixed costs.