The effect of resource consumption accounting and the theory of constraints on a company profit: An application in a production company

The first step that needs to be done in order to carry out the production process effectively and smoothly in the production enterprises and also to harmonize the production activities is to identify and define the constraints in the production environment. At this point, the ability of the companies to achieve their targets depends on the determination of the present restraints in the production system and managing them properly. Moreover, for companies to perform appropriate pricing activities in a competitive environment, accurate, and also reliable and timely cost information is crucial. Some reasons, such as new advancements in production technologies, increasing competition and the inability of traditional cost methods to provide sufficient support for enterprises' decision-making processes, make it necessary to consider new methods and perspectives in cost management. In this context, in order to eliminate the deficiencies existing in traditional and contemporary costing models, a new costing model has been developed within the framework of resource consumption accounting model. The purpose of the current study is to identify and eliminate the constraints that occur in production processes and to establish a resource consumption accounting model developed in a production enterprise in order to help companies to reduce their costs and increase their profitability even more.