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Most methods and techniques in management accounting assume that a production technology consumes inputs in a fixed proportion. This paper develops product-costing measures for pricing and decision-making purposes for homogeneous variable-proportion technologies using first-order conditions and Euler's theorem. The results developed in this paper show that relevant costs under these circumstances are conventional full costs adjusted by a factor that is a function of returns to scale of a variable-proportion technology.In the development of the above results, it is shown that, for any technology, the price of a product is a linear function of its full cost only for a certain type of demand function. For all other demand functions, the relationship between the price and the full cost is nonlinear.The fixed- and the variable-proportion technologies are compared using a Monte Carlo simulation to determine the relative magnitudes of errors in product costs and prices, and differences in profit resulting from inappropriate use of a fixed-proportion model in a variable-proportion technology environment. The simulation results indicate that the costs are about 3 percent higher for fixed-proportion technology over a range of returns to scale values. The pricing error, on the other hand, is significant and varies from 70 percent lower to 50 percent higher compared to the correct prices. Variance analyses of difference in profits under the two technologies indicate that the errors in costing and pricing under fixed-proportion technology result in significantly lower profits. ©2007 American Accounting Association