The purpose of the cost accounting system is to
A) produce information for inventory valuation
B) authorize release of raw materials
C) direct the movement of work-in-process
D) determine material requirements

Question

Quizplus · Accepted Answer

The purpose of the cost accounting system is to produce information for inventory valuation, which includes the cost of raw materials, labor, and overhead needed to produce each unit of inventory. This information is used in financial reporting, pricing decisions, and to determine the profitability of products or services. While the cost accounting system may also be used to authorize the release of raw materials, direct the movement of work-in-process, and determine material requirements, these are not the primary purposes of the system.

The Purpose of the Cost Accounting System Is to