In This Chapter
Determining costs: The second most important thing accountants do
Comprehending the different needs for cost information
Contrasting costs to understand them better
Determining product cost for manufacturers
Padding profit by manufacturing too many products
Measuring costs is the second most important thing accountants do, right after measuring profit. But really, can measuring a cost be very complicated? You just take numbers off a purchase invoice and call it a day, right? Not if your business manufactures the products you sell – that’s for sure! Businesses must carefully record all their costs correctly so that profit can be determined each period, and so that managers have the information they need to make decisions and to control profit performance.