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Lies, Damned Lies, and Cost Accounting by Reginald Tomas Lee

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CHAPTER 20

Worth

By now you will hopefully come to the conclusion that costNC is of little value and does little more than create confusion. You do not really need it unless someone from the outside requests it. For example, if a customer asks you for your costs as a part of your relationship with them, you will have to calculate and provide them. In these cases, I’ve proposed that instead of using the idea of a cost, we use the idea of worth.

Understanding Worth

Let’s say you bought 10 pounds of flour for $10. We know that the cost transaction was buying the flour. Using a pound will not cost you $1. It will not cost you anything. It is consuming capacity you have already purchased. In that context, all you really need is to determine a reasonable ...

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