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CMA Intermediate · Cost Accounting · Introduction to Cost Accounting

Which of the following is a practical difficulty most commonly cited when a costing system is installed and is therefore best addressed by obtaining top management support and training staff?

Resistance from existing staff, who fear extra work or exposure of inefficiency, is the commonly cited practical difficulty. It is addressed through top management support, communication and training. Costing is neither prohibited by law nor does it replace financial accounts or make cost computation impossible.

  1. AResistance from existing staff who fear extra work or exposure of inefficiencyCorrect
  2. BA statutory ban on keeping cost records
  3. CInability to compute any cost at all in a manufacturing firm
  4. DAutomatic cancellation of financial accounts

Explanation

Typical practical problems in installing costing are resistance from staff at various levels, lack of top management support and shortage of trained personnel. Remedies include securing management commitment and training. Costing is not banned, and it does not cancel financial accounts or make cost computation impossible.

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