Which of the Following Statements About the Key Features of Cost

question 47

Multiple Choice

Which of the following statements about the key features of cost accounting and cost management is true?

• A) When making decisions about what products to produce, managers need to know how revenue and costs vary with changes in output levels.
• B) Managers need to understand that period costs remain the same from one period to the next.
• C) The costing system allocates direct costs and traces indirect costs to products.
• D) When making decisions, managers must understand that all revenue and costs are relevant.
• E) Cost accounting is used for managerial decision making, not for financial statements.

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Definitions:

Total Tax

The annual sum of all taxes owed by an individual or corporation, including federal, state, and local taxes, regardless of deduction or credit eligibility.

Taxable Income

The amount of income that is subject to income tax after deductions and exemptions.

Deductions

Amounts that are subtracted from gross income when calculating taxable income, including expenses, allowances, or specific exemptions.

Exemptions

Specific allowances that relieve individuals, organizations, or products from fulfilling certain conditions or requirements, often for taxes or regulations.