Which of the Following Statements About the General Procedure Used

Multiple Choice

Which of the following statements about the general procedure used to conduct a cost or profitability analysis is true?

A) The first step in conducting a cost or profitability analysis is to spread the natural account costs to the appropriate functional cost centers
B) Before determining the purpose of the cost analysis, natural cost centers must be identified
C) Before determining the purpose of the profitability analysis, natural account costs must be allocated to functional cost centers
D) Good profitability analyses require that the various costs be partitioned into direct and indirect expenses so the proper aggregations can be made
E) Natural accounts are the only way that costs can be classified for either a profitability or cost analysis