Consider the Following Statements

question 42

Multiple Choice

Consider the following statements.
i. The optimal product costing system is the most accurate system.
ii. The optimal product costing system is the one that minimises the cost of poor decisions from inferior information.
iii. The optimal product costing system is the most expensive one.
Which of the statements is true?

• A) i
• B) ii
• C) iii
• D) None of the given answers

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Definitions:

Administrative Expense

Expenses related to the general operation of a business, such as office supplies, management salaries, and utilities.

Fixed Selling

Costs that remain constant regardless of the volume of goods or services sold.

Direct Labor-Hours

The total hours worked by employees that are directly involved in the manufacturing process.

Raw Materials Cost

The expense of materials that are used in the manufacturing process to create goods, not yet processed or altered.