Which of the following can signal the need for a new product costing system?
A) Line managers do not believe reported product costs.
B) Complex products have high reported profitability while more basic high-volume products show small margins or even losses.
C) Overhead rates are high and increasing.
D) All of the given answers.

Question

Quizplus · Accepted Answer

All of the given answers can signal the need for a new product costing system. If line managers do not believe reported product costs, it could be an indication that the current system is not accurate or transparent enough. If complex products have high reported profitability while more basic high-volume products show small margins or even losses, it could be an indication that the current system is not properly allocating costs. If overhead rates are high and increasing, it could be an indication that the current system is not properly capturing and allocating overhead costs.

Which of the Following Can Signal the Need for a New