Which of the following can be described as a fiduciary duty of cost assignment?
A) ABC should be implemented to ensure adequate cost control regardless of cost.
B) Department managers should select activity cost drivers that increase their chance for success.
C) Effective delegation requires management to maintain close control over processes that incur costs.
D) Managers must avoid expanding their scope beyond the functions they control.
E) Cost assignment should begin with a limited scope of activities that managers believe are critical to the success of the company.

Question

Quizplus · Accepted Answer

Cost assignment involves identifying the activities and resources that drive costs and allocating those costs to the products, services, or other cost objects that consume them. A fiduciary duty requires managers to act in the best interests of the company and its stakeholders, including shareholders, customers, and employees. Therefore, managers should identify the limited scope of activities that are critical to the success of the company, as this helps to ensure that costs are assigned to the appropriate cost objects in a way that maximizes the value of those activities. The other options do not accurately describe a fiduciary duty of cost assignment.

Which of the Following Can Be Described as a Fiduciary