In calculating product costs for a value stream with multiple products, average product costs are a good estimate of individual product costs if

Question

Quizplus · Accepted Answer

Average product costs are a good estimate of individual product costs if the products are similar and consume resources in approximately the same proportion (A), the product mix is relatively stable (B), and the products are homogenous (C). Therefore, all of these factors must be present to use average product costs as an estimate of individual product costs.

In Calculating Product Costs for a Value Stream with Multiple