Which of the Following Statements About the General Procedure Used

question 51

Multiple Choice

Which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?

• A) The first step in conducting a cost or profitability analysis is to spread the natural account costs to the appropriate functional cost centers
• B) Before determining the purpose of the cost analysis, natural cost centers must be identified
• C) Before determining the purpose of the profitability analysis, natural account costs must be allocated to functional cost centers
• D) Good profitability analyses require that the various costs be partitioned into direct and indirect expenses so the proper aggregations can be made
• E) Natural accounts are the only way that costs can be classified for either a profitability or cost analysis

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