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Accurate Costing Is Key to Profitability - Dynamic Environments Expose Weaknesses in Traditional Approaches
by SAP America Inc

To maximize profitability, companies must know the true cost of making and delivering their products and services. Traditional cost accounting, devised in a simpler era, does not satisfy that need. Then, direct costs (chiefly materials and labor) were a large percentage of total costs, so the inability to determine indirect cost allocations was not an important factor in determining what a company earned on each of its products. Today, these indirect and overhead costs represent a far greater pe...
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