Langfield-Smith7e IRM Ch04.docx

PurposeCurrent/FutureproductcostsShort-termdecisions:productmix,pricingFutureLonger-termstrategicdecisionsFutureLong-termpricingFuturePlanfutureproduct-relatedcostsFutureControlofproductcostsCurrentReimbursementcontractsCurrentExternalreporting(inventorycalculation)Current , ().Whilethereisnoinventorytocostinaservicebusiness,,determiningtheoptimalmixofservicestooffer,determiningtheimpactonprofitsofdroppingaserviceoraddinganewservice, Thefrequencywithwhichmanagersrequireproductcostinformationrelatestotheusetowhichtheinformationistobeput,,forshort-termandstrategicdecisionmaking,,althoughthescopeoftheanalysiscanbeextendedtoincludeproduct--termdecisionswillberequiredinfrequently—-,productcostsforcontrolandforinventoryvaluationarerequiredregularly,, ountants(CIMA)anisation,anisationsthisfigurefellto34percent(CIMA,2009). -sizedmanu