A cost accounting system should be revised when
A)the existing cost accounting system provides information that is representative of operations.
B)the existing cost accounting system could be updated, just to keep ahead.
C)the existing cost accounting system does not produce information that reflects the way various products use scarce resources.
D)management wants to change the system, even though the information is relevant and correct.
E)a new system would be easier to understand but would not be reliable.

Question

Quizplus · Accepted Answer

The best time to revise a cost accounting system is when it does not produce information that accurately reflects how various products use scarce resources. This can result in incorrect costing information and misinformed management decisions. It is not necessary to update the system just to keep ahead, or to change the system solely based on management preference, as long as the existing system is producing relevant and correct information. A new system that is easier to understand but unreliable would not be beneficial.

A Cost Accounting System Should Be Revised When