Tag Archives: Traditional Costing

Flaws in Traditional Costing System

There are two flaws in traditional costing. One is that, in traditional costing, the selling price of a product depends solely on the costs. The problem with such method of pricing is that the customers may not find the resulting price acceptable. Also, the competitors may have lower prices or …

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Traditional Costing vs Target Costing

Traditionally, manufacturers would make use of the cost-plus approach to estimate the product price. A starting point for them would be to conduct market research to determine its market segment’s preferences and hence its products’ characteristics that will meet the customer’s needs. This will be followed by the design of …

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