ACC 206 Week 3 Week 3 Week 3 Week 3

Accounting
Tutor: None Selected Time limit: 1 Day

Describe three issues/problems that a company could encounter when trying to determine the actual cost of a good or service to be used in the cost of goods sold

Oct 6th, 2015

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A company could encounter problems related to allocation of costs for determining the actual cost of a unit produced. 

The first problem that could occur is determining the cost of direct materials pertaining to the good produced when the costs are fluctuating continuously.

The second problem is deciding how much of various workers’ wages should be attributed to the product. For instance 40 workers have worked for producing 3 different products. How much of their wages should be allocated to which product is the decision to be taken.

The third issue is deciding how much of fixed costs should be allocated to the product. For instance a machine is used to manufacture 3 goods. How much depreciation to be allocated to the product.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 6th, 2015

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Oct 6th, 2015
Feb 24th, 2017
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