I. Managers depend on relevant and reliable information about product unit costs
ID: 2419267 • Letter: I
Question
I. Managers depend on relevant and reliable information about product unit costs to manage their organizations.
A. Unit cost knowledge is used for __________________:
1. To help set reasonable _______________.
2. To help __________________ the cost of products or services.
B. Timely cost knowledge is used in day-to-day ____________________:
1. To manage activity ________________.
2. To ensuring __________________.
3. To negotiate a ________________ price.
C. Actual results and targets are used when _______________________:
1. To watch for changes in ___________________.
2. To watch for changes in ___________________.
D. Managers use unit costs when ________________ to internal and external users:
1. Inventory balances on the _____________________ .
2. Cost of goods sold/sales on the ____________________.
E. Job order costing supports the ____________________ process as summarized in Exhibit 6.
Explanation / Answer
Managers depend on relevant and reliable information about product unit costs to manage their organizations. A. Unit cost knowledge is used for Planning 1. To help set reasonable Selling Price. 2. To help _estimate the cost of products or services. . Timely cost knowledge is used in day-to-day Performance: 1. To manage activity Volume. 2. To ensuring Quality. 3. To negotiate a Selling price. C. Actual results and targets are used when Evaluating : 1. To watch for changes in Cost. 2. To watch for changes in Quality . D. Managers use unit costs when Communicating to internal and external users: 1. Inventory balances on the Balance sheet. 2. Cost of goods sold/sales on the Income Statement