Some management accountants argue that absorption costing provides an incentive to continue producing goods for inventory, even when sales decline. They go on to suggest that this incentive problem is alleviated if throughput costing is used. Discuss this position, making reference to the excess capacity in several manufacturing industries.

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"The EconomyThe Outlook: Manufacturing Confounds Economists," The Wall Street Journal, May 5, 2003, Clare Ansberry. Overview According to the article, many industries have excess capacity. Among them are the airline and telecom- munications industries, as well as several manufacturing industries, such as steel, aluminum, and aircraft manufacturing.