I had a few questions that I need answered posed to be by another student regarding the assignment you previously did for me see below: Wouldn’t you want your measure of output to be either the number of bottles produced or number of order fulfilled? Or do you have some other thoughts? I completely agree with you that managers need to do their best to accurately measure costs; however, I think that can often times be difficult to predict. In your example, if the government imposed new restrictions on the types of materials that can be used to contain bottled water may impact your cost structure or if there is an increase in demand for those materials due to an unforeseen shortage, the cost to produce your product could increase and your estimates are no longer relevant. Therefore, while cost estimates are very important, managers should be careful not to rely on them too heavily.
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