Multiple choice

1.  _____ arise as a result of strategic decisions about the scale and scope of an organization's activities. 

 a. Capacity costs 

 b. Discretionary costs 

 c. Mixed costs 

 d. Engineered costs 

2. _____ is the first step in estimating or predicting costs as a function of appropriate cost drivers. 

 a. Cost measurement 

 b. Cost determination

 c. Cost behavior investigation 

d. Cost driver identification 

3.  The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ¬¬¬¬¬_____. 

 a. cost prediction 

 b. cost measurement 

 c. activity analysis 

 d. budgeting 

4.  _____ is not a primary purpose of a cost management system. 

 a. Providing aggregate measures of inventory value and cost of goods sold 

 b. Providing cost information for strategic management decisions 

c. Providing cost information for operational control 

d. All of these answers are correct