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In a meeting among company executives and cost accountants, the CEO asked for the product costs for the company’s newest product line. The cost accountant replied, “Product cost depends on the reason for knowing it.” Do you agree? Explain.


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There could be a number of reasons why the CEO is asking about product costs. Those reasons could center on pricing issues, marketing plans, cost of holding inventory, distribution strategies, marketing mix changes, financing, divisional profit projections, or presentations to stakeholders.

The response from the cost accountant is all …

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