Question

2. Cost information is very useful to: a. Manufacturing organizations b. Service organizations c. Not-for-profit organization d. All of the above e. None of the above

Answer 1

Option (D)"All of these" is correct .

Cost information are date releted to cost incurred by organizations. It is the value of money that has been incurred to production or executing services. The cost information helps to know the profitability of organizations.

Manufacturing organizations :- Manufacturing organization do productions of goods. It incurred the cost in form of direct material ,direct labor , manufacturing overhead , selling and administration expenses etc to determine to required fund reasonable selling price to earn profit/gain for growth of organization.

Service Organization:- In same way , Service organization incurred the cost in form of labour like wages to professional staff, unqualified staff, secterial staff etc to providing services. These cost item help to determined reasonable services providing selling price to customers.

Not-For Profit organizations:- These organization do work on for charity in form of providing product / Services to disabled persons free of cost or resonable price . They use their cost information for estimating fund required for charity and collect fund in form of subscription, donation etc.