A traditional cost accounting system assumes that all costs can be classified as fixed with respect to changes in the units or volume produced.

A smaller standard error indicates that:

Bienvenue, Inc., has identified the following overhead costs and activity drivers for next year:     Expected       Expected   Overhead Item Cost Activity Driver Quantity Setup costs $100,000 Number of setups    500 Ordering costs    40,000 Number of orders  3,200 Maintenance  200,000 Machine hours  4,000 Power   20,000 Kilowatt hours 80,000 ​ The following are two of the jobs completed during the year:   Job CC Job DD Direct materials $375  $1,000 Direct labor $350  $1,200 Units completed 100  160 Direct labor hours 50  80 Number of setups 1  4 Number of orders 4  5 Machine hours 20  25 Kilowatt hours 30  50 ​ The company’s normal activity is 4,000 direct labor hours. If the activity drivers are used to allocate overhead costs, the unit cost (rounded to two decimal places) for Job DD would be

Explain the relationship between the Cost Management System and the Financial Accounting System.

A managerial accountant has determined the following relationships between overhead and several possible bases:   Basis Correlation with Total Overhead Direct labor hours 0.842 Direct labor dollars 0.279 Machine hours −0.837  Employee minutes in coffee breaks −0.243  ​ The best basis for overhead application is

Cost assignment is one of the key processes of the cost accounting system.

A continuous budget is a moving twelve-month budget.

Describe the two major subsystems of the Cost Management System and briefly summarize their importance.

Brigade Builders, Inc. designs decks, gazebos, and play equipment for residential homes. The following was provided for the year ended September 30, 2018: ​ Direct labor $800,000 Direct material purchases 80,000 Administrative expenses 155,000 Overhead 95,000 Selling expenses 325,000 Beginning direct materials inventory 43,000 Beginning designs in process 21,000 Ending direct materials inventory 18,000 Ending designs in process 45,000 ​ The average design fee is $900. There were 3,500 designs processed during the year.Required: a. Prepare a statement of cost of services sold. b. Prepare an income statement. c. Discuss three differences between services and tangible products.

Cost management information benefits production, marketing, and customer service systems as well as being a crucial part of managerial decision making.