Which of the following statements is true?
A) Product costing is not used in financial accounting.
B) There is only one way to assign indirect costs.
C) All product cost numbers can be easily derived due to their objective nature.
D) Product costing is limited to manufacturing firms.
E) Relative profitability depends upon the way we assign costs and define outputs as successful or unsuccessful.

Question

Quizplus · Accepted Answer

Product costing methods and the allocation of indirect costs can significantly influence the perceived profitability of products or services. Different costing methods can allocate costs in various ways, leading to different conclusions about the relative profitability of products. This is because the way costs are assigned and outputs are defined can change the cost structure of a product, thus affecting its profitability analysis.

Which of the Following Statements Is True