The Costs Generated by the Cost Management System Are Used

question 67

Multiple Choice

The costs generated by the cost management system are used to

• A)assess product/service profitability.
• B)establish prices for products with significant competition.
• C)determine underlying reasons for variations from standards.
• D)all of the above.

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Definitions:

Allocation Base B

A criterion or standard used to distribute overhead costs among various cost objects.

Step-down Method

A cost allocation method used in accounting to distribute overhead costs to various cost objects based on a hierarchical sequence of allocation bases.

Custodial Services

These are services related to the maintenance and cleaning of buildings and facilities.

Square Feet

A unit of area measurement equal to a square measuring one foot on each side.