1. To value closing stocks according to a well established principle of accounting (matching purpose) i.e match total expenses a total revenue
2. To evaluate the cost of sales and therefore the profits in a period in a manner consistent with the principles used to value closing stock.
3. To set prices which allow for pre-determined profit margin on total costs.
4. To ensure that products are earning enough revenue to cover not only the variable cost of sales but also a fair share of fixed costs so that the company at least breaks even.
Titany answered the question on October 12, 2021 at 07:28
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