Good Procedures for Cost Control Include All of the Following

question 45

Multiple Choice

Good procedures for cost control include all of the following except:

• A)Systems that accurately capture data collection and other costs associated with the project on a daily basis.
• B)Policies and practices that quickly identify overbudget situations and then find causes and seek solutions.
• C)Daily reporting of costs to the communication liaison.
• D)Policies and practices that find and account for underbudget situations.
• E)Policies and practices in the research organization that require the liaison
• To communicate the budget picture to clients and to senior managers at the
• Research company.

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Definitions:

Machine-Hours

A measure of production activity that indicates the amount of time machines are used in the manufacturing process.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a basis for allocating labor costs to products.

Activity-Based Costing

A method in cost accounting that assigns costs to products and services based on the activities involved in their production or delivery.

Activity Rates

Rates used in activity-based costing to assign overhead costs to products or services, based on the activities that drive those costs.