Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Which of the following statements about the key features of cost accounting and cost management is TRUE?
A)When making decisions about what products to produce, managers need to know how revenue and costs vary with changes in output levels.
B)Managers need to understand that period costs remain the same from one period to the next.
C)The costing system allocates direct costs and traces indirect costs to products.
D)When making decisions, managers must understand that all revenue and costs are relevant.
E)Cost accounting is used for managerial decision making, not for financial statements.

Question

Use the information below to answer the following question(s).Big Island Coffee Co.produced and sold 120,000 units last year.Per unit revenue and costs were as follows:
  Fixed manufacturing overhead and administrative salaries are fixed costs.The per unit amounts are based on last year's production.
-Which of the following statements about the key features of cost accounting and cost management is TRUE?
A)When making decisions about what products to produce, managers need to know how revenue and costs vary with changes in output levels. 
B)Managers need to understand that period costs remain the same from one period to the next. 
C)The costing system allocates direct costs and traces indirect costs to products. 
D)When making decisions, managers must understand that all revenue and costs are relevant. 
E)Cost accounting is used for managerial decision making, not for financial statements.

Quizplus · Accepted Answer

Managers need to understand how revenue and costs vary with changes in output levels to make informed production decisions.

Use the Information Below to Answer the Following Question(s)