Full cost accounting
Full cost accounting means that when we want to figure out how much something costs, we don't just look at the obvious things like the price tag or how much it costs to make. We need to look at everything that goes into it, even if it's not something we pay for directly.
For example, if we want to know how much a toy costs, we can't just look at how much it took to make the toy or how much we pay for it in the store. We also need to think about things like how much electricity was used to make the toy, how much it costs to transport it to the store, and even how much it cost to make the packaging.
When we add up all of these things, we get the "full cost" of the toy. This is important because it helps us understand the impact of making or buying something. For example, if something has a high full cost, it might mean it's not as good for the environment because it takes a lot of energy to make and transport it.
Full cost accounting is a way to make sure that we're looking at the whole picture when we're trying to understand the cost of something.
For example, if we want to know how much a toy costs, we can't just look at how much it took to make the toy or how much we pay for it in the store. We also need to think about things like how much electricity was used to make the toy, how much it costs to transport it to the store, and even how much it cost to make the packaging.
When we add up all of these things, we get the "full cost" of the toy. This is important because it helps us understand the impact of making or buying something. For example, if something has a high full cost, it might mean it's not as good for the environment because it takes a lot of energy to make and transport it.
Full cost accounting is a way to make sure that we're looking at the whole picture when we're trying to understand the cost of something.