Which of the following engagement observations would provide the least motivation for management to amend or replace an existing cost accounting system?
A . The distorted unit cost of a service is 50 percent lower than the true cost, while the true cost is 50 percent higher than the competition’s cost.
B . The organization is losing $1,000,000 annually because it incorrectly outsourced an operation based on information from its current system.
C . The cost of rework, hidden by the current system, is 50 percent of the total cost of all services.
D . 50 percent of total organizational cost has been allocated on a volume basis.
Answer: D