Using average product cost for a value stream means that individual product costs are not known. This is adequate mainly because
A)waste can be eliminated at the activity and process level without knowing product costs.
B)a fully accurate product cost is not needed for many decisions.
C)standard costing variances may actually impede improvement decisions.
D)all of the above.

Question

Quizplus · Accepted Answer

All of the given options are valid reasons why using average product cost for a value stream is adequate. Waste elimination can be done at the activity and process level without knowing individual product costs. Also, fully accurate product costs are not always necessary for all decision-making. Additionally, standard costing variances may hinder improvement decisions rather than aid them. Therefore, all options are correct.

Using Average Product Cost for a Value Stream Means That