Which of the Following Statements About Cost Management Is True

question 115

Multiple Choice

Which of the following statements about cost management is true?

• A) It requires that managers actively strive to increase revenues.
• B) It only focuses on inventoriable costs.
• C) It is not affected by the organization's customers.
• D) It only applies to period costs.
• E) It requires efficient management of the use of the cost drivers in the value-added activities.

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable, typically resulting from taxes or price controls.

Rent Ceiling

A form of price control where a maximum limit is placed on the rent that can be charged for housing.

Equilibrium Rent

The rental price at which the quantity of properties landlords are willing to lease equals the quantity that tenants are willing to rent.

Quota

A type of trade restriction that limits the quantity of a good that can be imported or exported during a specific time period.