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So far the Tenn-Tech Plc seems to be adhering to activity based costing. The deficiencies of this approach are self evident by the fact that the company is facing a plethora of problems in all the sections, which are obviously proving detrimental to the achievement of the ultimate goal of the company, which is the augmentation of its net profits…
The situation demands a prompt and a proactive action from the top management. Hence it is vital to bring in a new management accounting approach that is more in consonance with the prevalent developments and circumstances. Resorting to throughput accounting seems to be just the right approach for Tenn-Tech Plc in the existing scenario. However, this is easier said then done. This calls for a total paradigm shift on the part of the key players and the stakeholders at Tenn-Tech Plc.
It is imperative for the top echelons of power at Tenn-Tech Plc to be cognizant of the marked shift in their perception that an adherence to a new management accounting system will call for. Throughput accounting will not be merely an another management accounting system, but will be in fact an entire new way in which the organization under consideration will be required to perceive itself and its role in the global market scenario ("Throughput Accounting" 67). ...
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