Question

- Why is product cost important? (4 sentences)

- Why is period cost important? (4 sentences)

- Why is relevant range important? (4 sentences)

Answer 1

a)Product cost is important because businesses absolutely need to know how much it costs to create your product. Without knowing product cost, you can my underselling your product to make a profit. If incorrectly known, the income statement will be false. It is essential to know product cost in any sector.

b) Period costs are important because businesses need to know and track how much it costs them over time to product a product. Without knowing period cost, businesses will likely be underselling their product to make a profit. If incorrectly known, the income statement will be false. It is essential to know period cost in any sector.