Which of the following are indicators of an outdated costing system?
i. Products which are difficult to make have high profit margins.
ii. Competitors prices appear unrealistically low.
iii. Customers are not deterred by price increases.
iv. A lot of time is spent on special product cost projects.
A) i, ii and iii
B) ii, iii and iv
C) i, iii and iv
D) i, ii, iii and iv

Question

Quizplus · Accepted Answer

All four indicators suggest an outdated costing system. Products that are difficult to make but still have high profit margins may indicate that the costing system is not accurately capturing the complexity and cost of production. Competitors' prices appearing unrealistically low could suggest that the company's costing system is not competitive or accurate. Customers not being deterred by price increases might indicate that the prices are not set based on a current understanding of value and costs. Spending a lot of time on special product cost projects suggests inefficiencies and inaccuracies in the standard costing system, necessitating frequent adjustments.

Which of the Following Are Indicators of an Outdated Costing