Activity 5
During this Pandemic day that happening to the country many people are affected when it comes to finances. As a member of the family you always think of, on how you can help and is necessary to think a small business because it can provide opportunities to earn and keeping money close to home.
Direction Answer the following question and Write your answer on the same answer sheet and mark as Activity 5.
1. Why is important to know the proper use of the principle of costing?
2. What is the advantage of putting the correct mark up in every product that you want to sell?
Share
Answer:
1) Understanding the Cost Principle Is Important to Your Business. ... If you wish to be compliant with GAAP, the cost principle should be used. The cost principle maintains that the cost of an asset must be recorded at historical cost, or its original cost and should not be recorded at fair market value.
2) Increases profits: When you take markup pricing into consideration, it can help you set strategic prices for your goods and services that can generate a profit for your business. If you mark up your goods and services enough, you can help offset any expenses you incurred during production.