Question

question 3
4 pts
according to the theory of constraints, which of the following is considered a throughput?
sales dollars
raw material costs
a building
utility costs (e.g., gas, electricity, water, etc.)
a piece of equipment

Explanation:

According to the Theory of Constraints, throughput is defined as sales dollars minus the direct materials cost. Among the options, sales dollars is directly related to the concept of throughput as it represents the revenue generated from sales which is a key component in calculating throughput. Raw material costs are subtracted from sales dollars to get throughput (so they are not throughput itself). A building, a piece of equipment are fixed assets and utility costs are operating expenses, neither of which are considered throughput.

Answer:

Sales dollars