What is broad averaging, and what consequences can it have on costs?

For the answer to the question above, when applying that to a business, you are ignoring the variation in the consumption of resources by the different cost of objects or products that can lead to inaccurate and misleading cost data. In that result, it can negatively impact the marketing and operating decisions.

That costing method or approach uses a broad averaging for applying the cost of resources uniformly to cost objects. When in fact those are not uniform ways at all.