Question

Which of the following is a consideration for the design of a cost management system?

a. cost system should have a decision focus
b. different cost is used for different purposes
c. cost information for managerial purposes must meet the cost-benefit test
d. all of the above

Answer 1

Correct Answer:

Option(d) is correct answer means all options (a),(b) and (c) are considered for the designing of cost management system. because designing of cost management system must be used for taking effective decision, It can also helps for controlling project specification cost, predict the future expenses and cost, this cost can be used for any other different purposes and the information supplied to managers are also should with the cost benefit rule.

Incorrect answers:

Option(a) is incorrect statement because cost system should not be design for making decions only, but it can also used for other different purposes and should meet the cost benefit test.

Option(b) is incorrect statement because this cost is not only used for different purposes only,but it must be used decision focus as well as should follow the cost benefit rule.

Option(c) is incorrect statement because meeting cost benefits test is not only the objective of designing cost management system.But other purposes are also there.

So correct answer is option (d)