In most accounting information systems, costs are often recorded and coded so they can be summarised based on different
A) Cost drivers
B) Cost objects
C) Volumes of activity
D) Independent variables

Question

Quizplus · Accepted Answer

Costs are usually recorded and coded according to the cost object they relate to (e.g. a product, a department, a customer, etc.). This enables the costs to be aggregated and analysed by different cost objects, which is essential for decision-making and performance measurement purposes. Cost drivers (A) refer to the factors that cause or influence the amount of a cost, such as labour hours, machine usage, or materials consumed. Volumes of activity (C) may also affect costs, but they are not a primary basis for coding costs in most AISs. Independent variables (D) are not relevant to this question, as costs are not typically recorded in relation to them.

In Most Accounting Information Systems, Costs Are Often Recorded and Coded