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Product costing: the experience of MicroSave-Africa
01.09.2003
Two methods of product costing - allocation-based costing and activitybased costing - are outlined here: and a working example of allocation-based costing is given. Allocation units and bases, transfer pricing and marginal pricing are explained. Staff from MicroSave-Africa's partners have been trained in this methodology, and this paper describes how partner institutions introduced costing to their systems and discovered which products were making losses. Results from the costings have in some cases led to alterations to the products and to an increase in profitability.