A cost management system should provide the means to develop
A)the most accurate product or service costs.
B)a reasonably accurate product or service cost given cost-benefit considerations.
C)a product or service cost that does not include any non-value-added overhead.
D)a costing system that traces all costs directly to individual products or services.

Question

Quizplus · Accepted Answer

A cost management system should balance the accuracy of product or service costs with the cost-benefit considerations. It should be reasonably accurate and provide the necessary information for decision-making while not being too costly to implement. Tracing all costs directly to individual products or services may not be necessary in all situations and may not capture the full picture of indirect costs. Excluding non-value-added overhead may also not be feasible in some cases.

A Cost Management System Should Provide the Means to Develop