A manufacturing plant identifies a production bottleneck: Direct materials cost $300,000, direct labor cost $200,000, variable overhead cost $100,000, fixed costs $150,000.

• Requirements:
  • Apply throughput accounting principles to calculate the throughput contribution per unit.
  • Identify and analyze the impact of the bottleneck on production capacity and profitability.
  • Recommend strategies to alleviate the bottleneck and improve throughput.
  • Prepare a throughput accounting report considering bottleneck constraints.
  • Discuss the advantages of throughput accounting over traditional costing methods.