Question

The primary objective of the cost management information system is to provide

a. the Internal Revenue Service with information about taxable income.
b. management with information useful for planning and control of operations.
c. banks and other creditors with information useful in making credit decisions.
d. stockholders and potential investors with useful information for decision making.

Answer 1

The main goal of the cost management information system is to aid management in deciding how to efficiently operate and allocate resources by providing essential cost-related information.

Step-by-step explanation:

The primary objective of the cost management information system is to provide management with information useful for planning and control of operations. This system plays an integral role in helping management make decisions that foster efficient resource allocation within an organization by reflecting on costs and ensuring the economic welfare of the company. A key component of this system is its contribution to a market's efficiency in terms of information dissemination. Just as the market price system efficiently informs participants about the relative scarcities within a market, the cost management system helpfully guides company management in their decision-making process based on the scarcity of resources, production costs, and operational requirements.It's important to understand that price controls, by contrast, can obscure the actual scarcity of resources and lead to misallocation, highlighting the value of transparent and accurate cost management for internal decision-making.