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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 32
Product Cost Definitions
Three possible product cost definitions were introduced: (1) value-chain, (2) operating, and (3) product or manufacturing. Identify which of the three product cost definitions best fits the following situations (justify your choice):
a. Determining which of several potential new products should be developed, produced, and sold
b. Deciding whether to produce and sell a product whose design and development costs were higher than budgeted
c. Setting the price for a new product
d. Valuation of finished goods inventories for external reporting
e. Determining whether to add a complementary product to the product line
f. Choosing among competing product designs
g. Calculating cost of goods sold for external reporting
h. Deciding whether to increase the price of an existing product
i. Deciding whether to accept or reject a special order, where the price offered is lower than the normal selling price
Three possible product cost definitions were introduced: (1) value-chain, (2) operating, and (3) product or manufacturing. Identify which of the three product cost definitions best fits the following situations (justify your choice):
a. Determining which of several potential new products should be developed, produced, and sold
b. Deciding whether to produce and sell a product whose design and development costs were higher than budgeted
c. Setting the price for a new product
d. Valuation of finished goods inventories for external reporting
e. Determining whether to add a complementary product to the product line
f. Choosing among competing product designs
g. Calculating cost of goods sold for external reporting
h. Deciding whether to increase the price of an existing product
i. Deciding whether to accept or reject a special order, where the price offered is lower than the normal selling price
Explanation
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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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