Product costing systems and product profitability
Response to the following problem:
Potter Corporation has gained considerable market share in recent years for its specialty, lowvolume, complex line of products, but the gain has been offset by a loss in market share for its high-volume, simple line of products. This has resulted in a net decline in its overall profitability. Advise management about specific changes that may be required in its cost accounting system and explain why the existing system may be inadequate.