ACCT1511 Study Guide - Final Guide: Profit Margin, Financial Statement
Document Summary
There are several alternatives to allocate the oh cost to calculate product costs. Give 3 examples of the types of decision that the managers make using total unit costs. Determine the normal pricing of the product; i. e: many manufacturing businesses use markup to determine the selling price for their products. Judgement about the efficiency of the production method, by comparing the actual (cid:272)ost (cid:449)ith sta(cid:374)dardised (cid:272)ost/target (cid:272)ost/(cid:272)o(cid:373)petitor(cid:859)s (cid:272)ost. Whether to introduce/delete that product line from the production; eg: if a product has high costs but low profit margin, manufacturers might decide to stop producing that product and switch to a more profitable product. Valuing the cogs an inventory account => determine the np for a period and also comply with the financial reporting requirement. Cost measurement: the process of determining the dollar amount for labour, raw materials, oh used in production. the expressed dollar amount can be actual cost or based on estimations.
