The Cost Accounting Function Determines Product Costs, Costs of Goods

Multiple Choice

The cost accounting function determines product costs, costs of goods sold, and inventory values for financial reporting purposes and management reporting. What is a sample control activity that could be used to control for misstatements in costs that may result in a material misstatement of financial reports?

A) Document and authorize product cost accounting procedures that describe costing methods.
B) Use a BOM for every product in all steps of production.
C) Allocate indirect labor and overhead to products on an approved and consistent basis.
D) Ensure that system development is reviewed by appropriate IT and accounting staff.