Indicate whether each of the cost control methods listed in a through (f) is (1) preventive, (2)
Question:
Indicate whether each of the cost control methods listed in a through \(f\) is (1) preventive, (2) corrective, or (3) diagnostic.
a. Preparation of an annual production budget of variable and fixed costs.
b. Analysis of cost variances in excess of 10 percent over the prior quarter.
c. Performing a market study on innovative ways to reduce the amount of packaging materials.
d. Comparison of actual production costs to budgeted production costs.
e. Asking for competitive bids on materials from a new supplier pool due to an unexpected price increase in product from a current supplier.
f. Using year-to-date information to update standard costs effective for the next fiscal year.
Step by Step Answer:
Cost Accounting Foundations And Evolutions
ISBN: 9781618533531
10th Edition
Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn