Answer:
A. Accounting systems generally consist of several subsystems, each designed to process a particular type of transaction.
C. Supervision is especially important in organizations without responsibility reporting or adequate segregation of duties
Explanation:
A. Indeed, because the accounting system consists of several subsystems, such as data systems, the workforce, the procedures and instructions, and software with each designed to process a particular type of transaction.
B. When an organization doesn't assign its staff their specific responsibilities it then becomes especially important to supervise the employees, because failing to do so may result in low worker productivity.
For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR) column. Account Section of worksheet Debit (DR) or Credit (CR) column? 8. Service Revenue 9. Accounts Payable 10. Cash 11. Depreciation Expense—Building 12. Sandy, Withdrawals 13. Accumulated Depreciation—Building
Answer:
dh xdr uh detox scv dry jcb dr utf xxv bird sync
Explanation:
weir acoustic rabbit eui Inc's zero
Question 7 At Runner, the engraving department is a bottleneck, and the company is considering hiring an extra worker, whose salary will be $69,873 per year, to mitigate the problem. With the extra worker, the company will be able to produce and sell 7,700 more units per year. The selling price per unit is $15.00. Cost per unit currently is $7.81 as follows: Direct material $2.77 Direct labor 0.90 Variable overhead 0.24 Fixed overhead (primarily depreciation of equipment) 3.90 Total $7.81 Calculate the annual financial impact of hiring the extra worker. The annual net profit will by $ by hiring the extra worker.
Answer and Explanation:
Given:
Cost of extra worker salary = $69873
Units with extra worker =7700 units per year
Selling price = $15.00
Cost per unit = $7.81
(Direct material = $2.77
Direct labour = $0.90
Variable overhead = $0.24
Fixed overhead = $3.90)
Calculate net income:
Sale revenue($15*7700units) =$115500
Deduct expenses:
Direct material ($2.77*7700units) =$21329
Direct labour($0.90*7700 units)= $6930
Variable overhead(0.24*7700 units) =$1848
Fixed overhead allocated(3.90*7700 units) = $30030
Net profit = $55363
Therefore profit increases with additional worker
Harold runs a business that manufactures electrical equipment. Recently, he organized a press conference to promote the eco-friendly technology that his business uses to manufacture the products. The next day, many local newspapers published articles about this event. The press release has helped improve Harold’s corporate image. Which type of promotion did Harold use in this example? A. sales promotion B. personal selling C. public relations D. advertising
Answer: c, public relations
Explanation:
I got it right
Answer:
C. Public relations
Explanation:
For all Plato users
A company declared and paid a cash dividend. The dividend would appear on the company's statement of cash flows as: Select one: a. an addition to net income in order to arrive at net cash provided by operating activities under the indirect method. b. a deduction from net income in order to arrive at net cash provided by operating activities under the indirect method. c. a deduction under investing activities. d. a deduction under financing activities.
Answer:
d. a deduction under financing activities.
Explanation:
As if the company declared and paid the cash dividend so the same is to be considered in the financing activities of the cash flow statement.
This amount should be shown in the negative amount as it decreases the cash that means it is an outflow of cash
Hence, the correct option is d. and the same is to be considered
What current trend in the sport or entertainment area do you think will fall into disfavor with the consumer population
Answer:
Bantering of words between entertainers in the social media forums.
Explanation:
Today, it is not unusual to find entertainers in the sport and entertainment industries, exchanging words, and settling squabbles on social media platforms. Such behaviors are unprofessional and persistently resorting to these crude ways would create tensions among fans who are the consumer population.
Most fans who are enlightened would definitely not be favorably disposed to these trends. Entertainers should do well not to foster disunity among themselves.
. Use the following adjustment information to complete the Adjustments columns of the work sheet. Depreciation on equipment, $18 Accrued salaries, $21 The $27 of unearned revenue has been earned Supplies available at December 31, $90 Expired insurance, $30 3. Extend the balances in the Adjusted Trial Balance columns of the work sheet to the proper financial statement columns. Compute totals for those columns including net income.
Question Completion:
Since the Trial Balance was not provided, we assume that the Supplies account had a beginning balance of $120 for the purpose of this exercise. Any other figure can be substituted for this balance.
Answer:
Adjusted Trial Balance as of December 31: Income Statement Balance
Debit Credit Expense Revenue Sheet
a. Depreciation expense $18 $18
Accumulated Depreciation $18 -$18 assets
b. Accrued Salaries $21 $21
Salaries Payable $21 $21 liabilities
c. Unearned Revenue $27 -$27 Liab.
Earned Revenue $27 $27
d. Supplies Expense $30 $30
Supplies $30 -$30 assets
e. Insurance Expense $30 $30
Prepaid Insurance $30 -$30 assets
Explanation:
Company B with the adjusting events above, usually recorded through the adjusting journal, can also be adjusted directly in the trial balance with their effects on the financial statements clearly demonstrated. Expenses have debit accounts while liabilities have credit accounts. Expenses reduce the net income, revenues increase the net income, while liabilities and assets can be reduced or increased as the case may be.
At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a temporary difference of $16 million in a liability for estimated expenses. Taxable income is $44 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the journal entry(s) to record income taxes, assuming it is more likely than not that three-fourths of the deferred tax asset will not ultimately be realized.
Answer:
1 . Dr ncome tax expense 7
Dr Deferred tax asset 4
Cr Income tax payable 11
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
Explanation:
Preparation of Journal entries
JournalDebitCredit
(In million)
1 . Dr ncome tax expense 7
($11-$4=7)
Dr Deferred tax asset 4
($16× 25% = $4)
Cr Income tax payable 11
($44 × 25% = $11 )
2. Dr Income tax expense3
Cr Valuation allowance-Deferred tax asset3
(3/4 × $4) = $3 million
Deferred tax asset= ($16× 25%)
Deferred tax asset= $4 million
Income tax payable= ($44 × 25%)
Income tax payable= $11 million
Last year Janet purchased a $1,000 face value corporate bond with an 11% annual coupon rate and a 15-year maturity. At the time of the purchase, it had an expected yield to maturity of 12.21%. If Janet sold the bond today for $993.14, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
20.10%
Explanation:
The first task is to compute the bond's purchase price last year which is found using the bond price formula below:
bond price=face value/(1+r)^n+ annual coupon*(1-(1+r)^-n/r
face value=$1000
r=yield to maturity=12.21%
n=number of annual coupons in 15 years=15
annual coupon=face value*coupon rate=$1000*11%=$110
bond price=1000/(1+12.21%)^15+110*(1-(1+12.21%)^-15/12.21%
bond price=1000/(1+12.21%)^15+110*(1-0.177634192 )/12.21%
bond price=$918.50
Rate of return=(price today-initial price+coupon received)/initial price
price today= $993.14
initial price=$918.50
coupon received(for 1 year)=$110
Rate of return=($993.14-$918.50+$110)/$918.50=20.10%
Chelsea Company has sales of $400,000, variable costs of $10 per unit, fixed costs of $100,000, and a target profit of $60,000. How many units were sold?
a. 12,000
b. 18,000
c. 24,000
Answer:
24,000
Explanation:
Chelsea company had sales of $400,000
Variable cost is $10 per unit
Fixed costs is $100,000
Tarhet profit is $60,000
Thetefore The units sold can be calculated as follows
400,000-10Q-$100,000= $60,000
$400,000-$100,000-10Q= $60,000
$300,000-Q= $60,000
$300,000-$60,000= 10Q
$240,000= 10Q
Q= 240,000/10
Q= 24,000
If a firm has a sales price per unit of $6.00, a variable cost per unit of $4.00, and a break-even point of 40,000 units, fixed costs are equal to
Answer:
$80,000
Explanation:
From marginal analysis concepts, the break-even point is determined using the formula.
Break-even in units = fixed cost / contribution margin per unit
For this firm,
break -even = 40,000 units
Contribution margin per unit = selling price - variable costs
=$6 - $4 =$2
Therefore:
40,000 = fixed costs/ $2
Fixed costs = $40,000 x 2
Fixed costs = $80,000
Karla owns a monopolistically competitive firm that has many competitors that advertise. What can Karla realistically hope to achieve if she decides to advertise as well?
Answer:
1.) Katy can educate her consumers about the differences between her store and her competitors.
2.) Katy can protect her consumer base.
Explanation:
Using advertisements, Katy can show her consumer the differences and advantages that her products have over those of her competitors thereby encouraging them to patronise her.
She can also use these adverts to protect her customer base from her competitors because when they see the adverts, they will be even more encouraged to keep buying from Katy and will thus be less likely to switch to her competitors.
The other two options are incorrect.
Oklahoma Oil Corp. paid interest of $792,000 during 2021, and the interest payable account decreased by $129,500. What was interest expense for the year
Answer:
The interest expense for the year is $662,500.
Explanation:
The following are given in the question:
Interest paid during the year 2021 = $792,000
Amount of decrease in interest payable account = $129,500
The interest expense for the year can be calculated as follows:
Interest expense for the year = Interest paid during the year 2021 - Amount of decrease in interest payable account = $792,000 - $129,500 = $662,500
Therefore, the interest expense for the year is $662,500.
According to Nohria, Groysberg, and Lee, within an organization, the primary lever to address the drive to ____ is the reward system.
Answer:
Civillization
Explanation:
At the end of the year, Mercy Cosmetics’ balance of Allowance for Uncollectible Accounts is $450 (credit) before adjustment. The balance of Accounts Receivable is $17,500. The company estimates that 15% of accounts will not be collected over the next year. What adjustment would Mercy Cosmetics record for Allowance for Uncollectible Accounts?
Answer:
Mercy Cosmetics
Adjustment to record for Allowance for Uncollectible Accounts is:
$2,175
Explanation:
The Allowance for Uncollectible Accounts = $450 credit before adjustment .
After adjustment the Allowance for Uncollectible Accounts will equal $2,625 (15% of $17,500).
So the adjustment for the period is to debit the Uncollectible Expense account with $2,175 and then credit the Allowance for Uncollectible Accounts with $2,175. This adjustment brings the Allowance for Uncollectible Accounts to $2,625 as stated earlier.
As the price of margarine rises by 20%, a manufacturer of baked goods increases its quantity of butter demanded by 5%. Calculate the cross-price elasticity of demand between butter and margarine. Are butter and margarine substitutes or complements for this manufacturer
Answer:
Cross Price Elasticity = 0.25Goods are SUBSTITUTESExplanation:
The Cross-price elasticity of two goods can be calculated by the formula;
= % Change in quantity demanded of A / % change in price of B
= 5/20
= 0.25
Positive Cross Price elasticities mean that the goods are substitutes.
This is because when the price went up in one good, the quantity demanded of the other good went up because people switched to the other good from the first good because the prices went up showing that the goods are substitutes.
Suppose that there are 150,000 employed individuals and 6,000 individuals without a job, but actively searching for one. How large will unemployment be in the following period if the job finding rate is 75%, while the job separation rate is 4%
Answer:
The unemployment will be as large as 7,500 individuals given the above scenario.
The above represents an increase of 1% in the unemployment rate, resulting from the job finding rate of 75% and job separation rate of 4% in the following period.
Explanation:
a) Data and Calculations:
Employed individuals = 150,000
Unemployed individuals = 6,000
Total labor force = 156,000
Job finding rate = 75%
Job separation rate = 4%
number of new jobs = 4,500 (6,000 * 75%)
Number of new unemployed = 6,000 (150,000 * 4%)
Total number of unemployed individuals = 7,500 (6,000 - 4,500 + 6,000)
Old Rate of unemployment = 6,000/156,000 * 100 = 4%
New Rate of unemployment = 7,500/156,000 * 100 = 5%
Imagine that you are holding 5,800 shares of stock, currently selling at $65 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds. January call options with a strike price of $70 are selling at $5, and January puts with a strike price of $60 are selling at $6. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at $51, $65, $71
Answer:
call strike price $70
call premium received $5
put strike price $60
put premium paid $6
you pay $5 - $6 = -$1
stock price
$51 $65 $71
stock value $51 $65 $71
put value $9 - -
call value - - -$1
premium paid -$1 -$1 -$1
net stock value $59 $64 $69
total # of stocks 5,800 5,800 5,800
portfolio's value $342,200 $371,200 $400,200
The cost for system 1 of dispensing maps is:
Y = 0.2 X + 6000, where Y = Total Costs in $, X=total number of maps dispensed (in a year).At 3000 maps per year, what is the marginal cost and what is the average cost?
[Tip: marginal cost means what is your additional cost by dispensing one more map. average cost means what is the cost per one map [for 3000 maps total]]
Answer:
a. The marginal cost is $0.2.
b. The average cost is $2.20.
Explanation:
Given in the question are the following:
Y = 0.2X + 6000 ................ (1)
Where; Y = Total Costs in $
X = total number of maps dispensed (in a year)
a. What is the marginal cost?
The marginal cost (MC) can be obtained by differentiating equation (1) with respect to X as follows:
MC = dY/dX = 0.2
Therefore, the marginal cost is $0.2.
b. What is the average cost?
This can be calculated as follows:
At X = 3000 maps
Substitute X = 3000 into equation (1) in part a to obtain the total cost as follows:
Y = 0.2(3000) + 6000
Y = (0.2 * 3000) + 6000
Y = 600 + 6000
Y = $6,600
The average cost now be calculated using the following formula:
Average cost = Y / X ...................... (2)
Where;
Y = Total Costs in $ = $6,600
X = Number of maps per year = 3,000
Substituting the values into equation (2), we have:
Average cost = $6,600 / 3,000 = $2.20
Therefore, the average cost is $2.20.
Business-process outsourcing (BPO) is a type of outsourcing that consists of contracting operations and responsibilities of a specific business process to a third-party service provider. Such outsourcing generally began with manufacturing firms outsourcing their supply chain but has grown into a much wider range of processes, including marketing, finance, sales, and accounting. According to a recent Forbes article, the revenue of the global outsourced services industry rose from $45 billion in 2000 to nearly $100 billion in 2012. An article in BusinessWeek suggested that BPO can save end users anywhere from 15 to 85 percent. International BPO service providers are particularly attractive since offshore labor offers an additional 25 to 30 percent cost savings. Furthermore, approximately 25 percent of the cost savings results from BPO firms’ proprietary products. The remaining 10 to 30 percent in cost reduction accrues from consolidated operations. Suppose you are the manager of a U.S.-based company and must decide whether to outsource your human resources department. Based on the above information and your study, please outline arguments supporting and opposing a decision to outsource this function of your business. Please explain from a purely business standpoint, any issues that might arise from contracting with an international-based versus U.S.-based BPO service firm? (Chapter 6, page 199)
Answer:
From a purely business perspective, outsourcing is likely to be right choice for the company, because as the statistics shown in the question prove, outsourcing offers great reduction in costs for American businesses.
However, there are some issues that could arise. The human capital in the foreign target country may not be as high as in the US, for example, and an outsourcing process could result in costs reduction, but also in a loss of quality in the company's operations.
There is also the human issue: outsourcing would require the firing of those employees whose jobs will be replaced by the outsourcing.
The _____ is an agency of the federal government that offers both managerial and financial assistance to small businesses.
A. Business Incubator Agency
B. Federal Aid Program
C. Business Welfare Administration
D. Small Business Administration
E. Council for Small Business
Answer:
D. Small Business Administration.
Explanation:
The Small Business Administration (SBA) is an agency of the federal government that offers both managerial and financial assistance to small businesses. SBA was established in 1953 as an autonomous or independent agency of the government of the United States of America. Generally, it is saddled with the responsibility of providing both managerial and financial assistance and counseling to small businesses in order to bolster the American economy.
The small business administration (SBA) serves as an intermediary between entrepreneurs and investors or creditors, in order to provide them with the necessary funds required to plan, start and grow their business.
Basically, SBA provides services such as entrepreneurial development, access to funds, advocacy and contracting to small businesses (entrepreneurs) in the United States of America.
On August 31, Year 1, the general ledger of a company shows a balance for cash of $7,774. Cash receipts yet to be deposited into the checking account total $3,168, and checks written by the academy but not yet processed by the bank total $1,255. The company's balance of cash does not reflect a bank service fee of $18 and interest earned on the checking account of $29. These amounts are included in the balance of cash of $5,872 reported by the bank as of the end of August. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, Year 1. (Amounts to be deducted should be indicated with a minus sign.)
Answer:
Reconciling Bank balance
Balance per Bank statement 5,872
Add: Deposit in transit 3,168
Less: Outstanding checks (1,255)
Bank balance per Reconciliation $7,785
Reconciling Cashbook balance
Balance per General Ledger 7,774
Add: Interest Income 29
Less: Bank Service Fee 18
Company Balance per Reconciliation $7,785
You deposit $ 6,577 in your account today. You make another deposit at t = 1 of $ 9,769 . How much will there be in your account at the end of year 1 if the interest rate is 10.3 percent p.a.?
Answer:
Total FV= $18,776.85
Explanation:
Giving the following information:
Interest rate= 10.3%
First deposit= $6,577
Second deposit= $9,769
To calculate the future value, we need to use the following formula on each deposit:
FV= PV*(1+i)^n
FV1= 6,577*1.103^2= 8,001.64
FV2= 9,769*1.103= 10,775.21
Total FV= $18,776.85
Juniper Corp. makes three models of insulated thermos. Juniper has $306,000 in total revenue and total variable costs of $192,780. Its sales mix is given below: Percentage of total sales Thermos A 30 % Thermos B 48 Thermos C 22 Required: 1. Calculate the (overall) weighted-average contribution margin ratio. 2. Determine the total sales revenue Juniper needs to break even if fixed costs are $73,075. 3. Determine the total sales revenue needed to generate a profit of $78,070. 4. Determine the sales revenue from each product needed to generate a profit of $78,070.
Answer:
Follows are the solution to this question:
Explanation:
In Option 1:
[tex]\to CM \ ratio = \frac{(Sales - variable\ cost)}{variable\ cost}[/tex]
[tex]= \frac{(306,000 - 192,780)}{306,000}\\\\= \frac{113,220}{306,000}\\\\= 0.37 \%[/tex]
In Option 2: .
[tex]\to BEP = \frac{Total \ fixed \ cost}{CM \ ratio}[/tex]
[tex]= \frac{73,075}{0.37}\\\\=\$ \ 197500[/tex]
In Option 3:
[tex]\to Required \ sales = \frac{(73,075+ 78,070)}{0.37}[/tex]
[tex]=\frac{151145}{0.37}\\\\=408500[/tex]
In Option 4:
[tex]\to Sales A = 408500 \times \frac{30}{100} = 1361666.67\\\\\to Sales B = 408500\times \frac{48}{100} = 851041.667\\\\\to Sales C = 408500\times \frac{22}{100} = 1856818.18\\\\[/tex]
This year Army purchased $3,700 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipment into service during the year, she does not claim any depreciation expense for the equipment.
a. After the accident, Amy had the choice of repairing the equipment for $1,880 or selling the equipment to a junk shop for $690. Amy sold the equipment. What amount can Amy deduct for the loss of the equipment
b. After the accident, the Army repaired the equipment for$ 1,370. What amount can Army deduct for the loss of equipment?
c. After the accident, Army could not replace the equipment so she had the equipment repaired for $4,300. What amount can Army deduct for the loss of the equipment?
Answer: Check explanation
Explanation:
a. Since Amy bought the equipment for $3700 and sold the equipment for $690, the amount that Amy can deduct for the loss of the equipment will be:
= $3700 - $690
= $3010
b. Here, the amount that Army can deduct for the loss of equipment will be the lesser of the amount Amy bought the equipment which is $3700 or the cost of the repair which is $1370.
Therefore, $1370 will be deducted.
c. After the accident, Army could not replace the equipment so she had the equipment repaired for $4,300. What amount can Army deduct for the loss of the equipment?
Here, the amount that Army can deduct for the loss of equipment will be the lesser of the amount Amy bought the equipment which is $3700 or the cost of the repair which is $4300.
Therefore, $4300 will be deducted.
What are the sources of brand equity?
Answer:
Ello, Imposter here
Explanation:
Brand equity is the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself.
hope this helps :P
Answer: According to Keller (2003) and his CBBE model, brand equity emerges from two sources namely brand awareness and brand image. According to this model, consumers build associations in their minds around a brand as the result of the marketing programs companies develop for their brands.
Explanation: None.
Define the limits of the principle of commonality in regards to individuals, government, and corporations.
Answer:
The answer is below
Explanation:
Given that principle of commonality deals with things that are generally good or beneficial to the whole society regardless of time, space, and cultures. For example, education. However, there are some limitations to the principle of commonality, in relations to government, corporations, and individuals, such as:
1. Lawful subordination: often, corporations are compelled to carry out their activities in a certain way, otherwise they will be sanctioned heavily. This can also be applied to individuals and governments when it comes to making decisions that need approval based on established laws and legal procedures.
2. Economic power: for most common goods that are considered beneficial to society are often capital intensive. Be either corporation, government, or individuals, need a good amount of capital to facilitate necessarily sustainable advancement.
he Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 11,900 10,900 12,900 13,900 Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.00 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $99,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $39,000 per quarter. Required: 1. Calculate the company’s total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole. 2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.
Answer:
1. Total estimated direct labor cost = $148,800
2. Total estimated manufacturing overhead cost = $410,880
3. Total Cash disbursement for the fiscal year = $254,880
Explanation:
Please see attached detailed explanation of the above questions and answers.
If the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. The study is called a a. budget analysis. b. project analysis. c. reimbursement analysis. d. cost-benefit analysis.
Answer:
D. Cost-benefit analysis
Explanation:
Cost-benefit analysis can be defined as a strategic approach which typically involves measuring and estimating the overall cost of a project, as well as all possible profits to be derived.
This ultimately implies that, the cost-benefit analysis helps business owners or project managers to weigh the benefits associated with a particular project and how to decide on what decisions (actions) to be taken.
Hence, if the government decides to build a new highway, the first step would be to conduct a study to determine the value of the project. Therefore, this study is generally referred to as cost-benefit analysis because involves weighing the incremental benefit against the incremental cost of a decision.
In conclusion, when individuals such as decision-makers or project manager, is implementing and executing a project, it is very essential and important that he does a cost-benefit analysis; by weighing the overall and potential benefits or gains to be derived from that project in comparison with the costs of execution. Thus, when the incremental benefits is greater than the incremental cost of the decision, then it is logical and safe to make the move or do it.
A decreasing-cost industry is one in which: a. contraction of the industry will decrease unit costs. b. input prices fall or technology improves as the industry expands. c. the long-run supply curve is perfectly elastic. d. the long-run supply curve is upsloping.
Answer:
B
Explanation:
When we talk of a decreasing cost industry, we refer to an industry in which the expansion of the industry will lead to a decrease in the unit production cost.
So with respect to the question at hand , the correct answer is that the input prices will fall as industry expands
The case of a a technological improvement is expected to drive a decrease in the input prices for production in the expanding industry
Explain the five steps of the theory of constraints (TOC) process. To what processes might the company in the case study apply TOC? Why would applying TOC to these processes be advantageous?
Explanation:
The theory of constraints (TOC) is a theory whose objective is to identify the most limiting constraint related to a systemic organizational process, that is, to identify the bottleneck that prevents an organization from carrying out its activities effectively and consequently achieving its objectives.
The steps are:
1- Identify: The first step is to identify the most limiting current constraint in the organization.
2- Exploit: In the exploit stage, it means making improvements with the resources available in the identified constraint.
3- Subordinate: In this stage, the review of other organizational activities that may interfere with the identified constraint is carried out, to identify whether there is how to make improvements in the subordinate activities that can guarantee the reduction of the constraint.
4- Elevate: In this stage, actions are implemented to eliminate the constraint if it has not yet been eliminated.
5- Repeat: In the last step, each step of the cycle is monitored so that there is continuous improvement in the elimination of the current constraint or a new constraint, so that the processes are constantly optimized.
TOC is effective in companies that use systemic production processes, as in a manufacture for example, whose stages of the production process are subordinate and one interferes in the quality of the other, which can interfere in the process as a whole.
The theory of constraint offers the continuous improvement of all processes and the elimination of current restrictions and the better identification of possible new restrictions, as well as the best use of organizational resources, which generates for the company greater profitability, less waste and less time delivery, improving the entire organizational process.
