What is the primary trade-off that an accountant must consider when deciding whether to identify cost drivers?
A) Will the cost driver identification provide different costs for different purposes?
B) Is the cost/benefit of the process reasonable for more accurate cost behavior obtained?
C) Will the cost relationships be too complex to understand?
D) Will material-related drivers be more accurate than labor-related drivers?.
E) There is no trade-off to consider when using cost drivers.

Question

Quizplus · Accepted Answer

The primary trade-off an accountant must consider is whether the benefits of more accurately identifying cost behaviors outweigh the costs involved in the process of identifying cost drivers. This involves evaluating the cost/benefit of the process to ensure that the more accurate cost information obtained justifies the resources expended.

What Is the Primary Trade-Off That an Accountant Must Consider