Question

Write down 5 advantages and disadvantages of cost
principle.​

Answer 1

Answer:

Companies can capitalize on a cost advantage in one of two ways: They can price their products the same as their competitors but make more profit because their costs are lower. They can lower their prices below those charged by competitors to attract more customers and gain market shares.

A cost disadvantage means your business is unable to create, produce, acquire, transport or distribute goods to customers at rates equal to or better than competitors.

Explanation:

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Answer 2

Advantages and disadvantages of cost  principle are Price Consolidation and Cost accounting respectively

Explanation:  

5 advantages  of cost  principle

• Wastes, losses, and inefficiencies are reduced.  
• Price Consolidation  
• Cost-cutting  
• Provides guidance on whether to build or buy.  
• Determine the reasons behind your profit or loss.  

5 disadvantages of cost  principle

• The costing records only indicate previous performance, but management makes long-term decisions.  
• Cost accounting incorporates costs at a specified pace.  
• The prior year's cost is not the same as current year's cost. As a result, cost figures aren't particularly useful.  
• When determining costs, financial character expenditures are not taken into consideration. As a result, the estimated cost is not always correct.  
• The cost is determined by the capacity that is completely utilized. If capacity is only half utilized, the cost may be inaccurate.