In this book, Corbett does a great job illustrating how our old cost accounting techniques are inadequate, and, more importantly, can lead us to make decisions which actually harm the bottom line. But he doesn't stop at simply pointing out the shortcomings of cost accounting, as most texts do. He takes the additional step of providing real financial statements and measures that support the concepts in TOC, and allow accountants to give production management the data they need. You can begin using these statements right away in your own company. In addition, he shows us how to use TOC to make various financial decisions. He even spends a chapter showing some of the criticisms of Throughput Accounting and provide warnings about its proper use.

After reading this book you will realize that calculating a product cost is like buying a house and then trying to figure out how much of the purchase price to assign to the bathroom faucet. "Product Cost" is a fallacy, and impossible to determine. All that really matters is Throughput, the difference between selling price and totally variable costs.

If you are a controller or cost accountant stuck between production managers who are eager to implement TOC improvements, and financial managers who still insist on overhead application and product costs, this is the book for you.

26 of 26 found the following review helpful:


An excellent primer  Aug 26, 1999 By Michael Clingan "theclaymoregroup.com"
I have to push myself to read most accounting books. This one pulled me along. As a Jonah's Jonah focused on eliminating market constraints I am constantly faced with the internal sell of new company policy. Often the resistance to change is couched in accounting terminology. This book provides the tools required to establish the mutual understanding needed for collaborative problem solving. Particularly helpful is the discussion relating TOC to TQM and JIT through their accounting issues. I highly recommend it.

9 of 9 found the following review helpful:


Good if you're familiar with TOC  Feb 23, 2004 By Erik L. Koski
This is a good explaination of why the various allocation based account methods lead to poor management decisions and a good introduction to a better way of accounting. It does not include how to reconcile throughput accounting with required GAAP reporting. The only book I know that does is The Measurement Nightmare, which is a rather difficult read. It would be very helpful to have a book with example problems to work, an explaination of the GAAP reconciliation process, and more detail into what costs are totally variable and non-totally variable.


Throughput Accounting  Jul 07, 2010 By gacleader1
Thomas Corbet provided the connection which brought it all together for me on the T.O.C. thinking process. All of Dr. Goldratt's books created the base of my knowledge, but "Throughput Accounting" is the one that tied up the loose ends of that information. For the first time since my studies of the Theory of Constraints began, I feel comfortable speaking with others about the thinking process.

Prior to reading this book, a number of people challenged my view on cost based accounting; now I understand enough to speak with confidence.

By itself, "Throughput Accounting" is excellent material and will help plant managers make informed decisions without the need for extensive cost accounting data. Together with the knowledge gained through other books on T.O.C., this book can help any organization reach unprecedented levels of improvement.

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