The Final Step in the Production Cycle Is the Cost

question 31

Multiple Choice

The final step in the production cycle is the cost accounting function.There are several principal objectives of the cost accounting system.Which objective listed below is not a principal cost accounting objective?

• A)to provide information for planning,controlling,and evaluating the performance of production operations
• B)to provide cost data about products used in pricing and product mix decisions
• C)to collect and process the information used to calculate inventory and cost of goods sold amounts that appear in the financial statements
• D)to provide tests of audit control functions as part of the AIS

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Definitions:

Overhead Costs

Expenses related to the operation of a business that cannot be directly attributed to a specific product or service, such as rent, utilities, and management salaries.

Idle Capacity

Unused or underutilized production capacity within a manufacturing operation, often leading to increased costs without corresponding revenue.

Activity-Based Costing

A method of accounting that identifies the activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Internal Decision-Making

The process within an organization by which decisions are made by its members or systems based on internal criteria, policies, and data.