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Why is product costing so important for firms? Explain how poor costing strategies can affect a...

Why is product costing so important for firms? Explain how poor costing strategies can affect a company.

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Product costing is very important as it makes the producer of certain product that all the costs incurred by them on creation of value to that product which inturn reflects in choosing particular Price for that product and wrong calculation of that product costs may lead to incorrect pricing.

Poor costing can lead to the following problems:

1) May lead to inadequate profit if such costing results areare than that of actual cost incurred.

2)May lead to loss of customers if such costing results are high than actual cost incurred.

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