(answered) After graduating you might decide to start a

small business

After graduating, you might decide to start a small business. As discussed in this chapter,
owners of any business need to know how to calculate the cost of their produ
GET THE ANSWER>> https://solutionlly.com/downloads/after-graduating-you-might-decide-to-
start-a-small-business

After graduating, you might decide to start a small business. As discussed in this chapter,
owners of any business need to know how to calculate the cost of their products. In fact, many
small businesses fail because they don’t accurately calculate their product costs, so they don’t
know if they are making a profit or losing money—until it’s too late.
Suppose that you decide to start a landscape business. You use an old pickup truck that you’ve
fully paid for. You store the truck and other equipment in your parents’ barn, and you store
trees and shrubs on their land. Your parents will not charge you for the use of these facilities for
the first two years, but beginning in the third year they will charge a reasonable rent. Your
mother helps you by answering phone calls and providing customers with information. She
doesn’t charge you for this service, but she plans on doing it for only your first two years in
business. In pricing your services, should you include charges for the truck, the barn, the land,
and your mother’s services when calculating your product cost? The basic arguments for and
against are as follows.
YES: If you don’t include charges for these costs, your costs are understated and your
profitability is overstated.
NO: At this point, you are not actually incurring costs related to these activities; therefore, you
shouldn’t record charges.

After graduating you might decide to start a small business

GET THE ANSWER>> https://solutionlly.com/downloads/after-graduating-you-might-decide-to-
start-a-small-business

1/1
Powered by TCPDF (www.tcpdf.org)