It is important that the product costs reflect as much of the diversity and complexity of the manufacturing process as possible so that:
A)product costs will reflect their relative consumption of resources.
B)there is less likelihood of cross subsidising of product costs.
C)non-value-added costs can be eliminated.
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

All of the options listed are important reasons why product costs should reflect as much of the diversity and complexity of the manufacturing process as possible. When product costs are based on their relative consumption of resources, there is less likelihood of some products being cross-subsidized at the expense of others. Additionally, identifying non-value-added costs can help to eliminate waste and increase efficiency in the production process. Therefore, all of these reasons are important and support the need for accurate cost accounting.

It Is Important That the Product Costs Reflect as Much