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Thursday, March 5, 2009

Standard cost in technical estimates

By-products may be valued at standard
costs. The standard may be determined by averaging costs recorded in the past and
making technical estimates of the number of units of original raw material going into the
main product and the number forming the by-product or by adopting some other consistent
basis. This method may be adopted where the by-product is not saleable in the condition
in which it emerges or comparative prices of similar products are not available.

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