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The full cost approach meets the requirements of traditional cost concepts

The full-cost approach meets the requirements of the traditional concept of cost:

1, the advantages of the full-cost approach: the full-cost approach to the concept of cost in line with financial accounting; full-cost approach to the cost of information calculated under the pricing of products under the important basis of decision-making; full-cost approach to the more adaptable to the need for long-term decision-making.

2, the disadvantages of the full-cost method: full-cost method under the unit cost of the product does not reflect the real performance of the production sector; using the full-cost method of determining the phased profit and loss. The results are often difficult for management to understand. It may even encourage enterprises to pursue output unilaterally and produce blindly. Resulting in backlogs and waste.