The direct cost assignment for specific cost object is classified as __________?
Correct answer: B. cost tracing
- A. cost object line cost
- B. cost tracing
- C. cost object indirect cost
- D. cost object staff cost
Explanation
Cost tracing assigns a cost directly to a specific cost object when the relationship can be identified economically, such as direct materials to a product. Indirect costs require allocation rather than direct tracing.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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