What is back flash costing?

Answer 1

Back flash costing is a cost accounting method that allocates costs to products after they have been manufactured, rather than at various stages during the production process. This approach typically involves summarizing costs at the end of a production run and assigning those costs to the finished goods based on actual output. It can simplify record-keeping and provide a clearer picture of product profitability, but may obscure detailed insights into individual production stages. This method is often used in environments with high-volume production and standardized products.