Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 3

Give three ways that management uses product costs.

Step 1 of 2

Costing is process of accumulating different cost under head of direct labor, direct material and factory overhead for the goods or service produced. The main purpose of costing is to understand the breakup of cost of manufacturing. This helps in understanding which heads are forming major portion of production costs and the assign it under controllable or uncontrollable category, and accordingly try to reduce costing.