Which of the Following Best Describes Cost Accounting

question 59

Multiple Choice

Which of the following best describes cost accounting?

• A) cost accounting serves the needs of both financial and managerial accounting.
• B) managerial accounting is a subset of cost accounting.
• C) financial accounting is a subset of cost accounting.
• D)cost accounting is an alternative to both financial and managerial accounting.

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Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal circumstances.

Sunk Costs

Sunk costs are past expenses that have already been incurred and cannot be recovered, and thus should not affect future business decisions.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen.

Cost Accounting System

A framework used to record, analyze, and allocate costs associated with a company's operations and production processes.