Task:
Many industries have excess capacity.
Among them are the airline and telecommunications industries, as well as several manufacturing industries, such as steel, aluminum, and aircraft manufacturing.
Some management accountants argue that absorption costing provides an incentive to continue producing goods for inventory, even when sales decline.
They go on to suggest that this incentive problem is alleviated if throughput costing is used.
DISCUSS THIS POSITION, MAKING REFERENCE TO THE EXCESS CAPACITY IN SEVERAL MANUFACTURING INDUSTRIES.