Throughput Costing (Super-Variable Costing)

1. Throughput costing is a relatively recent development in costing methods. This method assumes that the only truly variable costs are the costs for direct materials, so these are the only costs assigned to the product. All other costs (including direct labor) are expensed on the throughput contribution margin statement in the period in which they occur. See also absorption costing and variable costing. An inventory costing method that treats all costs except those related to variable direct materials as costs of the accounting period in which they are incurred. The variable direct material costs are the only ones included in inventory values. (Also called super-variable costing.)