A major purpose of cost accounting is to
A) classify all costs as operating or nonoperating.
B) measure record and report period costs.
C) provide information to stockholders for investment decisions.
D) measure record and report product costs.

Question

Quizplus · Accepted Answer

Cost accounting is primarily concerned with measuring, recording, and reporting product costs. These costs include direct materials, direct labor, and manufacturing overhead, and are used to determine the cost of goods sold and the inventory value of products. Operating and nonoperating costs are typically dealt with in financial accounting, and while cost accounting information may be useful to stockholders, its primary purpose is to assist management in making decisions related to cost control, pricing, and product profitability.

A Major Purpose of Cost Accounting Is to