Cost And Management Accountıng Deneme Sınavı Sorusu #1400943
"Peanut butter costing........................................."
Which of the following best completes the statement above?
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explains the importance of considering the semi-finished products as well as the finished goods |
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is the name given to a costing system that broadly averages or spreads the cost |
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relates the production methods and technologies with the costing methods chosen and comment on the prices |
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explores the differences between the application of weighted average and FIFO |
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produces a small variety of goods with much simpler processes with high costs |
Peanut butter costing is the name given to a costing system that broadly averages or spreads the cost of resources uniformly to cost objects. Producing higher variety of products causes companies to incur a higher variety of costs, as different products need different resources. In other words, every product does not use the same resources. This means that the cost of each unit should include only the cost of resources used in it’s production. Therefore, averaging the total cost to each unit (with the name given to it “peanut butter costing”) does not result in accurate cost calculation anymore.
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