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Traditional cost systems often struggle with accurately capturing indirect costs and may allocate overhead based on simplistic methods, leading to distorted product costs. They typically do not account for the complexities of modern manufacturing environments, such as automation and diverse product lines. Additionally, these systems can be inflexible, making it difficult to adapt to changes in production processes or market conditions. Consequently, businesses may make suboptimal pricing and production decisions based on inaccurate cost data.
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What is a traditional costing system?
a costing system that does not divide cost by function or allocation or een by each part of the manufacturing process. it takes a total cost and divides it by each part of the process. so essentially each part of the manufacturing process is assigned an equal estimated cost.
Who has a traditional economic system?
A traditional economic system would have to be a system based on the tradition of a particular region. that would imply that virtually every country has an economic system that is traditional.
What is the economic system in Kazakhstan?
Kazakhstan has a Traditional economy
What is the oldest economic system?
Traditional.
What are the different economic system?
traditional economic system command economic system market economic system
What is limitation of gym management system?
what is limitation of gym management system
What is the scope and limitation of a video rental system?
scope and limitation about video rental system
What is the limitation of hotel reservation system?
scope limitation of hotel reservation system?
What is the limitation of accounting?
one of the most limitation of accounting is measurement by historical cost
What is cost limitation?
advancing finances
Is there a Statute of limitation on court cost in Oklahoma?
is there a statue of limitation for court cost and fines in Oklahoma
What is the criticisms of current cost accounting method?
Itemise and evaluate the criticism of traditional cost of accounting system?
Scope and limitation of account receivable system?
scope and limitation of accounts receivable
What is the scope and limitation of student information?
what is the scope of limitation in student information system
What are the scope and limitation of travel agency?
scope and limitation of travel agency system
What is the definition of cost limitation?
it is advancing finance
Why traditional cost systems distort product cost?
In traditional cost system overheads are allocated to products based on predetermined rate and that’s why some of that cost which is not related to that product charged to it and due to which actual cost of product cannot be determined.
