Question
It is not unethical or irresponsible when managers use costing methods for products using simple, cost effective allocation rates rather than more accurate, and more
It is not unethical or irresponsible when managers use costing methods for products using simple, cost effective allocation rates rather than more accurate, and more costly, metrics. It should be noted that the cost benefit analysis should be taken into consideration. Does the cost weigh more than the profit that will be produced? Or is it the other way around. The managers use a more cost effective method because this does not only save them money, but it is also efficient and effective. A costly and accurate procedure takes a lot of time to produce. When it comes to cost accounting, data should be timely and relevant. Because the data would be useless if it was produced after the product has been produced and sold.
Another is that, it is not stealing if we charge the cost to customer. In order to create a product, there will surely be cost involved. No product can be produced for free because even labor is being paid. If we decided to not charge customers of the cost of the product then our laborers would not be able to receive a good salary. It can also be said that it is only but just to charge the customer for the cost of the product because they were the ones consuming the product that they bought. The manufacturer or company only makes them.
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