Question

Cost Accounting

a.)is concerned with assigning costs to various cost objectives.
b) attempts to satisfy the costing objectives of both financial accounting and managerial accounting.
c) provides cost information that supports planning, controlling, and decision making.
d) all of these.

Answer 1

The correct option is d) all of these.

Cost Accounting encompasses the allocation of costs to various objectives, serves the needs of both financial and managerial accounting, and provides information that aids in planning, control, and decision-making. Understanding different cost measures is key to evaluating cost patterns and their impact on profit.

Step-by-step explanation:

Cost Accounting has multifaceted objectives that include: assigning costs to various cost objectives (cost allocation), satisfying the needs of financial accounting and managerial accounting, and providing cost information to support planning, controlling, and decision-making processes.

An in-depth understanding of concepts such as fixed cost, marginal cost, average total cost, and average variable cost is critical as they offer distinct insights for a firm’s cost management and are instrumental in evaluating patterns of costs to determine potential profit. Recognizing the relationship between production and costs — where every factor of production corresponds to a factor price — helps in analyzing short-run costs and their implications for longer-term fiscal strategies.