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Throughput accounting, the Theory of Constraints' alternative to product costing, is being criticised for ignoring fixed costs and emphasizing short-term optimization by assuming that variables such as product price, customer orders, technology and production design are fixed and therefore appropriate for maximizing throughput. It is argued that the Theory of Constraints and thus also throughput accounting are little more than a powerful short-run optimisation procedures. This work explores the underlying concepts of throughput accounting to demonstrate how short-term decisions are made using throughput accounting. The superiority of throughput accounting over traditional product costing is demonstrated using a simple case study. In the case study it is demonstrated that with the throughput accounting approach, a much better decision can be made to optimize the system as opposed to using traditional costing approaches. The false underlying assumptions of product costing is also be exposed. This is followed by a real-world case study where a long-term decision is analyzed using both the traditional product costing/management accounting approach and the throughput accounting approach. In this particular case, the management of the organization must make the decision whether to accept or reject an order with long term investment implications. Using the traditional management accounting approach leads to one decision whereas using throughput accounting leads to the opposite decision. These two outcomes are compared and an analysis done as to why the differences in outcomes exist.