29-30 January 2004
London
London
One problem that exists in costing systems is the difficulty of allocating fixed costs to products. This is almost always done arbitrarily and there is an element of distortion, particularly if a number of products are involved. One way round this is to use Marginal or Direct Costing, which divides costs into fixed and variable costs.
Stock Turnover is a useful ratio for judging performance but there is no common yardstick that can be applied to all firms, as this varies according to the nature of the business.