For Operational Control,a Management Accounting System Should Include

question 125

Multiple Choice

For operational control,a management accounting system should include:

• A)Performance measures associated with basic business processes.
• B)Only financial-control measures,such as standard cost variances.
• C)High-level financial metrics such as return on investment (ROI)or return on sales (ROS).
• D)A combination of short-term and strategic financial-performance metrics.

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Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced, it includes all variable and fixed costs.

Fixed Capital

Long-term assets used in production, such as buildings, machinery, and equipment, which are not easily converted into cash.

Marginal Cost

The additional expenditure resulting from the production of an extra unit of a product or service.

Average Total Cost

The total costs of production (both fixed and variable costs) divided by the quantity of output produced, indicating the cost per unit of output.