In throughput costing, return is computed as sales minus material cost.Select one:TrueFalse

Breakdown the Problem

1. Identify the key concept in throughput costing.
2. Understand how return is calculated in this context.

Relevant Concepts

1. Throughput costing is a managerial accounting method that considers only variable costs tied directly to the production of goods (typically direct materials).
2. Return is generally understood as sales revenue minus the cost of goods sold (COGS).

Analysis and Detail

1. In throughput costing, only material costs are deducted from sales to compute the return, while other costs (like labor and overhead) are not included.
2. The formula for return in this context can be represented as: $\text{Return} = \text{Sales} - \text{Material Cost}$

Verify and Summarize

1. Verify that the premise aligns with the definition of throughput costing.
2. The statement reflects that return is indeed computed as sales minus material cost.

Final Answer

True, in throughput costing, return is computed as sales minus material cost.