Explain why one must be careful when accounting for erosion costs
What will be an ideal response?
Answer: Erosion costs occur whenever a company's new product competes against its existing products, thereby reducing the sales of these existing products. One must be careful in including the reduced sales. This is because the sales could be reduced anyhow if another company introduces a competing product. Also, if erosion reduces sales, then the costs are also reduced. In brief, one must be careful so that only the net additional revenue and costs should be included in the incremental cash flow—the increase in overall sales and costs to the company.
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The HR function of maintaining positive employee relations primarily includes:
A. maintaining performance measures on outcomes. B. offering training programs on effective teamwork. C. selecting only those applicants that are referred by employees. D. maintaining communication with union representatives. E. planning employee pay and benefits.
The audit report in the annual report is prepared by an internal auditor of a company
Indicate whether the statement is true or false