Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 5 - Activity-Based Costing and Activity-Based Management - Assignment Material - Questions - Page 177: 5-2

Answer

Managers should worry about product overcosting or undercosting because it can lead to incorrect pricing decisions, affecting profitability and competitive positioning. Overcosting may lead to higher prices, while undercosting can result in lower prices, both impacting a company's ability to maximize profits and market share.

Work Step by Step

Managers should worry about product overcosting or undercosting because it can lead to incorrect pricing decisions, affecting profitability and competitive positioning. Overcosting may lead to higher prices, while undercosting can result in lower prices, both impacting a company's ability to maximize profits and market share.
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