A Limitation of the Theory of Constraints and Throughput Costing

question 32

Multiple Choice

A limitation of the theory of constraints and throughput costing is that:

• A) Labour and overhead costs may be built up to excessive levels
• B) Any product mix changes would not generate immediate cash flow effects
• C) Management's attention is too focused on long-term results
• D) a and b are limitations

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Definitions:

Political economy

A branch of social science that studies the relationships between individuals and society and between markets and the state, using methods from both economics and political science.

Market capitalism

An economic system where decisions and investments are determined by the market, with goods and services produced and exchanged according to demand and supply.

Social welfare programs

Government-provided services designed to ensure a basic standard of living for all citizens, including healthcare, education, and income assistance.

Socialist capitalism

A mixed economic system that incorporates elements of both socialism and capitalism, often featuring private enterprise alongside significant government regulation and social welfare policies.