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Growing Science » Accounting » Application of throughput accounting in production mix decisions for a small metallurgical enterprise

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print)
Quarterly Publication
Volume 12 Issue 2 pp. 89-102 , 2026

Application of throughput accounting in production mix decisions for a small metallurgical enterprise Pages 89-102 Right click to download the paper Download PDF

Authors: José Renato Luchini, Anderson Rogério Faia Pinto, Rafael Henrique Faia Pinto, José Luís Garcia Hermosilla, Marcelo Botelho da Costa Moraes, Marcelo Seido Nagano

DOI: 10.5267/j.ac.2025.10.001

Keywords: Production Mix, Absorption Costing, Theory of Constraints, Throughput Accounting, Micro and small enterprises

Abstract: Micro and Small Enterprises are a critical catalyst for socio-economic development in Brazil. However, financial and technical limitations frequently hinder the access and implementation of management tools by Micro and Small Enterprises. This study addresses this challenge through a case study that applies the Throughput Accounting to determine the most profitable production mix for the small enterprise Bianfer Indústria Metalúrgica. The company manufactures and commercializes parts and components for agricultural machinery and equipment in Brazil. Production mix decisions are currently based on the owners’ experience, sales history, and Absorption Costing. This approach, however, generates additional costs and inventory thereby compromising the profitability of Bianfer Indústria Metalúrgica. The pursuit of enhanced profitability led to the formulation of three hypothetical scenarios to compare the production mix proposed by Absorption Costing and Throughput Accounting concerning the Return on Assets (ROA). Mathematical modeling and scenario simulations were conducted using the Microsoft Office Excel 365. The results indicate that Throughput Accounting is readily adaptable, solves the problem more quickly, and provides superior financial gains (ROA from 1.36% to 2.71%). This study addresses an important practical gap that can guide students, professionals, and researchers in the application of Throughput Accounting. The main contribution of this study is empirical evidence that Throughput Accounting is an effective management tool for Micro and Small Enterprises. The implementation of Throughput Accounting through a simple Microsoft Office Excel model can significantly improve production mix decision-making in Micro and Small Enterprises.

How to cite this paper
Luchini, J., Pinto, A., Pinto, R., Hermosilla, J., Moraes, M & Nagano, M. (2026). Application of throughput accounting in production mix decisions for a small metallurgical enterprise.Accounting, 12(2), 89-102.

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Journal: Accounting | Year: 2026 | Volume: 12 | Issue: 2 | Views: 74 | Reviews: 0

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