Which of the following statements about the general procedure used to conduct a cost or profitability analysis is True?
A)The first step in conducting a cost or profitability analysis is to spread the natural account costs to the appropriate functional cost centers
B)Before determining the purpose of the cost analysis,natural cost centers must be identified
C)Before determining the purpose of the profitability analysis,natural account costs must be allocated to functional cost centers
D)Good profitability analyses require that the various costs be partitioned into direct and indirect expenses so the proper aggregations can be made
E)Natural accounts are the only way that costs can be classified for either a profitability or cost analysis

Question

Quizplus · Accepted Answer

Good profitability analyses indeed require the partitioning of costs into direct and indirect expenses. This allows for accurate aggregation and analysis, enabling a business to understand where costs are incurred and how they impact profitability. Direct costs are directly attributable to a product or service, while indirect costs are not directly attributable but still necessary for the operation of the business. This distinction is crucial for accurate cost and profitability analysis.

Which of the Following Statements About the General Procedure Used