Which of the following statements about cost management is TRUE?
A)It requires that managers actively strive to increase revenues.
B)It only focuses on inventoriable costs.
C)It is not affected by the organization's customers.
D)It only applies to period costs.
E)It requires efficient management of the use of the cost drivers in the value-added activities.

Question

Quizplus · Accepted Answer

Cost management involves efficient management of the use of cost drivers in the value-added activities. This includes identifying cost drivers and finding ways to reduce or eliminate those costs. Cost management also involves cost control, which focuses on managing costs within the budgeted amounts, and cost reduction, which involves finding ways to reduce the cost of a product or service while maintaining or improving its quality. Therefore, option E is the only true statement about cost management.

Which of the Following Statements About Cost Management Is TRUE