A small manufacturer made the following statement:

"We don't need a product costing system. We are a small manufacturer with a just-in-time approach so that our inventories are minimal. We have no influence over product price; whatever the big fellows do, we simply follow. Anyway our accountants only comes in on Fridays and she is already far too busy to bother with a product costing system."

Required:

Distil from the literature, but express in your own words:

(a) the advantages for a reasonable product costing system

(b) the potential reasons for the owner's above attitude and do you believe this is a reasonable attitude? Why?

(c) your own assessment of the need for a reasonable product costing system