Adding Insurance Adj As An Expense

Collection: $712,901 ($59,408.42 monthly)

Insurance adj (40% of production): $475,267.30 ($39,605.61)

Production: $1,188,168.30 ($99,014.3 monthly)

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We will be using our total production as our full collection and the insurance adjustment as an expense.

Theory of Constraints

1. Your business is a series of dependent events. The output of one segment is the input of the next.
2. The tightest constraint or bottleneck in the system will control the final output of the entire system.
3. Expanding or improving the bottleneck or constraint will improve the output of the entire system,
4. A bottleneck is present when you see an accumulation of inputs that can not be processed into output.
5. To expand the capacity of a non-bottleneck, you will not see an increase in output, and you might even see an increase in overhead, leading to decreased profitability.