CPIM Practice Exam

Which component is NOT directly evaluated in throughput accounting?

1. Operating expense

2. Throughput

3. Production efficiency

4. Inventory

The correct answer is: Production efficiency

Throughput accounting focuses on maximizing the throughput of an organization, which is defined as the rate at which the system generates money through sales. In this context, throughput, operating expense, and inventory are all key components that are evaluated to determine the profitability and efficiency of processes. Throughput is a critical element since it represents the revenue generated from sales minus the variable costs associated with those sales. Operating expenses are directly assessed to understand how they impact overall profitability. Inventory is also a focal point as it ties directly into throughput; managing inventory levels effectively can enhance throughput. However, production efficiency, while important to overall manufacturing performance, is not a direct component evaluated in throughput accounting. Instead, throughput accounting emphasizes the financial implications of throughput rather than the productivity measurements of individual operations or processes. This distinction makes production efficiency the component that is not specifically analyzed within the framework of throughput accounting.