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

Question

Quizplus · Accepted Answer

Relative profitability depends on how costs are assigned and outputs are defined. Different methods of indirect cost allocation may result in different profitability measures for a product or service, and the nature of costs may not always be objective, making product costing more challenging. Product costing is not limited to manufacturing firms and is used in both financial and managerial accounting. There are different ways to assign indirect costs, such as activity-based costing or traditional costing.

Which of the Following Statements Is True