Discuss in detail the importance of product costing in price Estimation and profit management
Product costing is the accounting process of determining all the business expenses incurred in the manufacture of company products. These costs include raw materials, labor, wages, and transportation.
A product's price is estimated after considering the cost of producing it and then adding a small mark up. The revenues of a company must exceed its expenses for it to be profitable, so most sales decisions have to be based on cost.
Product costing helps a firm make data-driven decisions which in the long run will translate to higher profits.