Which of the following is an example of how managers use production cost reports to control costs? A. promoting products that are most profitable B. providing cost of goods sold for the income statement C. determining if newer, more efficient equipment should be acquired D. setting product prices high enough for the company to be profitable

Question

Business

Margaret Lowe

12 June, 08:08

Which of the following is an example of how managers use production cost reports to control costs? A. promoting products that are most profitable B. providing cost of goods sold for the income statement C. determining if newer, more efficient equipment should be acquired D. setting product prices high enough for the company to be profitable

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Walter · Answer 1

The answer is: setting product prices high enough for the company to be profitable.

Explanation:

Production cost refers to the cost that a company has incurred from the moment it manufactured its product, towards the delivery until it provided the product or service to the customers. Part of this cost are the taxes that are imposed on the product or service.

So, in order to control costs, the production cost report is being used by managers in order to set product prices high enough for the company to be profitable.

or example, if the production cost is higher than the sale price of a product, then the company could either lower their production cost or set their product prices high enough in order to be profitable. If they cannot do both, then they could stop producing the product or service.