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18 x12 ABC A - (A. COST ACCOUNTING SYSTEMS A TRADITIONAL...

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Cost Accounting Systems (A. Traditional Cost Accounting) COST ACCOUNTING SYSTEMS A. TRADITIONAL COST ACCOUNTING THEORIES: Basic concepts Cost Accounting 1. Cost accounting involves the measuring, recording, and reporting of A. product costs C. future costs B. manufacturing process D. managerial accounting decisions Cost management 3. The cost management function is usually under 2. The cost management information system provides information 4. The main focus of cost management information must be 5. With regard to the task of management’s decision making, cost management information is needed to A. make sound strategic decisions regarding choice of products, methods, and techniques. B. support recurring decisions regarding replacement of equipment, managing cash flow, etc. C. provide a fair and effective basis for identifying inefficient operations. D. provide accurate accounting for inventory, receivables, and other assets. Product costing 6. Product costing system design or selection: A. requires an understanding of the nature of the business B. should provide useful cost information for strategic and operational decision needs C. should be cost effective in design and selection D. all the above answers are correct Cost concepts Committed vs. Discretionary fixed costs Commited fixed costs 7. Which of the following is an example of a committed fixed costs? A. direct materials C. supervisor’s salary B. depreciation on a factory building D. insurance on a building 16.An example of a committed fixed cost is: Discretionary fixed cost 8. Which of the following is an example of discretionary fixed cost? building building Controllable costs 10.Controllable costs are: A. Costs that management decides to incur in the current period to enable the company to achieve operating objectives other than the filling of orders placed by customers. B. Costs that are governed mainly by past decisions that established the present levels of operating and organizational 227
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Cost Accounting Systems (A. Traditional Cost Accounting) capacity and that only change slowly in response to small changes in capacity.
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