ACCA Applied Knowledge · Management Accounting · Accounting for management
A manager at Dalton Co receives a report showing the total cost of each product, split into direct materials, direct labour and overheads. Which role of cost accounting does this report mainly serve?
The report mainly serves product costing and inventory valuation. Cost accounting analyses direct materials, direct labour and overheads to establish the cost of each unit, which supports pricing, control and valuing inventory, rather than statutory filing, tax or going concern assessment.
- AProviding information for inventory valuation and product costingCorrect
- BMeeting statutory filing requirements for shareholders
- CDetermining the corporate income tax payable by law
- DAssessing the going concern status of the whole company
Explanation
Analysing the cost of products into elements supports product costing and inventory valuation. Statutory filing, tax computation and going concern assessment are not the purpose of a product cost report.
Did you get it right without looking?
One question tells you little. A timed set on Accounting for management shows your real accuracy, how long you take and where you lose marks.
More Accounting for management questions
- Which of the following best describes the primary role of cost accounting within an organisation?
- Which of the following statements about the differences between financial accounting and management accounting is correct?
- A retail company's finance director compares the actual monthly costs of each store with the budget and asks store managers to explain the d…
- A company's sales ledger system shows that 40 customers each owe between $2,000 and $5,000. The credit controller wants information to help …
- A company spends $8,000 collecting and analysing additional market data. Management estimates that the improved decision it supports will in…
- Which of the following is a task of management accounting in supporting planning, control and decision-making?