COST ACCOUNTING
BALANCED SCORECARDS
Question
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The level of uncertainty of deviations of actual amounts from expected results is greater for discretionary costs than for engineered costs.
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Discretionary costs result from cause-and-effect relationships between outputs and inputs.
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Discretionary costs are added to or subtracted from in a step fashion.
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Discretionary costs are variable costs incurred in relation to capacity issues.
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Detailed explanation-1: -The level of uncertainty of deviations of actual amounts from expected results is greater for. discretionary costs than for engineered costs.
Detailed explanation-2: -Discretionary costs (avoidable costs) are costs or capital expenditures that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. Examples of discretionary costs include advertising, maintenance, training, R&D, etc.
Detailed explanation-3: -Examples of discretionary costs are advertising, building maintenance, contributions, employee training, equipment maintenance, quality control, and research and development.
Detailed explanation-4: -Advertising costs Advertising budgets are one of the most common types of discretionary fixed costs.
Detailed explanation-5: -Examples of discretionary fixed costs include advertising, research, public relations, management development programs, and internships for students.