Average costs are used for internal decision-making,but actual costs are required for calculating cost of goods sold.

Name: Average costs are used for internal decision-making,but actual costs are required for calculating cost of goods sold.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Actual costs, which reflect the exact amount spent on producing a product, are required for calculating cost of goods sold. Average costs, on the other hand, are used for decision-making purposes such as setting prices or determining profitability.

Average Costs Are Used for Internal Decision-Making,but Actual Costs Are