The importance of accounting for achievement in determining the optimal production mix to maximize the profits of industrial companies

Application study at Kronji Soft Drinks, Healthy Water, Juices and Dairy Co., Ltd., Iraq

Abstract

The modern manufacturing environment is characterized by a degree of uncertainty with many risks, as well as the presence of intense competition, and that managers, decision-makers use different methods of measuring costs to obtain

 appropriate cost. Information that helps in making the appropriate decision, that researchers and accounting scholars are constantly striving to improve methods. 

     The existing traditionalism and devising modern methods and techniques, especially since the traditional cost accounting has been subjected to many criticisms due to its failure to keep pace with the developments and changes in the modern manufacturing environment. This required fundamental updates in the methods and techniques of managerial accounting in order to suit the modern manufacturing environment, so came the emergence of the Throughput Accounting, which is the natural development of the theory of constraints and bottlenecks management and an advanced model of managerial accounting techniques, so this study aims to explain the concept of The approach to achievement accounting, its importance, its main measures and requirements for its application, and the extent of its ability to provide appropriate cost information to rationalize decisions and make optimal use of the restricted resource and determine the optimal production mix and its effect on maximizing profits compared to traditional cost systems. The study reached conclusions, including that accounting for achievement emanating from the theory of constraints is an approach that works in two directions, the first is concerned with providing financial and cost information that helps in rationalizing decisions, and the second works to identify the constraints that the company suffers from and work to address them, which works to increase achievement and maximize Profits. The indicators of the achievement accounting approach have shown its importance in planning for profitability and determining the optimal production mix, according to the priority of each product in achieving achievement at the company level. The study sample that produces multiple and different products and on a specific number of production lines requires the need to control the production capacity available to it (the supplier Restricted) and use it in an optimal way to achieve its goals. The study recommended paying attention to the techniques, approaches and modern systems of management accounting that serve the work of companies, such as the approach to accounting for achievement, which works to provide more accurate information that contributes to improving performance and increasing achievement, and solutions to problems and limitations in the company, which traditional systems cannot address.