Question

How could by products influence production decisions? (Disposal costs could be one consideration)

Answer 1

Answer The could by products in fluence pooduction decisions given that following * By products are less Signe fecant than The main product and may not require precise cost allocation. * No attempt is being made to Control the inventory of by products and to prevent them from losses dup to fraud (0) 280s. * No Entry for by produces 29 made at the time of production * only it should be made at the time of sale * It has bearing on the value of the procduct to which it assignment a cost. It results in disposal of cost. . Scanned with CamScanner

* The only reabon the management use (2) those allocation is to achieve valed cost of of goods. Sold amounts and investory Nalutrong under the sequellomants of the Voicul accounting standhood). * Since the costs of by products hole no relation ship to the value of the item soll. * If a company is enable to see praevial product proce Burthecronely high to move than of set. of production. Costs and Customers are con calling to accept higher prices * Then it should Cancel pooduction forrespective of how costs are allocated to varices byproducts, Scanned with CamScanner