ACCT 302: Cost Accounting! A True And False Quiz!

Managers rely on cost accumulation data to make informed decisions and effectively implement them. This data helps them understand and analyze the costs associated with various activities and resources within the organization. By having accurate cost information, managers can evaluate the profitability of different products or services, identify areas of inefficiency, and make necessary adjustments to improve performance. Therefore, the statement that managers use cost accumulation data to make decisions and implement them is true.

Accountants define a cost as a resource to be sacrificed to achieve a specific objective. This means that in accounting, costs are seen as something that needs to be given up or expended in order to accomplish a particular goal. It implies that costs are not seen as simply expenses, but rather as investments or sacrifices made in pursuit of a desired outcome. This definition aligns with the principles and practices of cost accounting, where costs are analyzed and allocated to various activities or products to determine their impact on profitability and decision-making.

An actual cost refers to the cost that has already been incurred in the past. It represents the true cost that has been paid or will be paid for a particular activity or project. This cost is based on the actual expenses and is not an estimate or projection. Therefore, the given statement that an actual cost is a historical or past cost is true.

A cost object could be anything management wishes to determine the cost of, for example, a department.

Costs are accounted for in two basic stages: accumulation followed by an assignment.