Signs that a product cost system is not working properly include
A) managers don't understand costs and profits.
B) the cost system was installed five years ago.
C) the cost system has multiple allocation bases.
D) the cost system is fully depreciated.

Question

Quizplus · Accepted Answer

If managers don't understand costs and profits, it indicates that the cost system is not providing accurate or meaningful information. This could be due to a variety of issues such as incorrect allocation of costs or lack of transparency in the cost calculation process. The other options provided are not necessarily indicators of a faulty cost system.

Signs That a Product Cost System Is Not Working Properly