Impact of fluctuations in inventory prices on cost flow and product costing

Efficient product costing is much emphasized in today's manufacturing environment because of their importance in management decisions. Product costs need to be as accurate as possible. If the costs are not accurate, pricing is not optimal. Product costing has direct and indirect effects on cash flows of companies. Volatile raw material prices bring challenges to reliability of product costing. The main contribution of this article is to investigate the effects of uncertain raw material prices in the context of product costing.