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Cost Accounting Definition and Importance

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Questions and Answers

How is cost accounting related to financial accounting?

Cost accounting relies on financial accounting for all its data
Cost accounting is only used in manufacturing and not in other sectors
Cost accounting is a refinement of financial accounting, focusing on determining the cost of each product or service (correct)
Cost accounting is an entirely separate field from financial accounting

What does cost accounting provide management with promptly?

The total revenue of the business
The number of employees in the organization
The cost of producing each article or rendering a service (correct)
The marketing strategy for each product

What is the primary objective of costing according to the text?

To increase the number of employees
To determine total revenue
To analyze the expenditure to know the total cost and its constituents (correct)
To predict future market trends

How would you define cost management based on the text?

A process that helps in predicting impending expenditures and controlling costs (D) Signup and view all the answers

What is included in the process of cost accounting?

Measuring, analyzing, computing, and reporting costs (D) Signup and view all the answers

Which phase of a project involves defining the required resources to complete the project activities?

Project Planning (C) Signup and view all the answers

What is the main goal of cost management in a project?

To reduce production expenses (C) Signup and view all the answers

What historical information can be used in resource planning to determine the physical resources needed for a project?

Data from comparable projects (B) Signup and view all the answers

Which method can be used in cost estimating to predict the cost of project activities?

Refining estimates as more information becomes available (D) Signup and view all the answers

What is the primary focus of cost management in a project?

Controlling resources needed for project activities (B) Signup and view all the answers

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