The process of assigning the indirect costs to any specific cost object is known as ___________?
Correct answer: C. cost allocation
- A. economic cost
- B. cost tracing
- C. cost allocation
- D. non-economic costs
Explanation
Cost allocation means assigning an indirect cost to a cost object using a reasonable allocation base. Cost tracing is reserved for costs that can be directly linked to the object.
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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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