The assignment of indirect costs to cost objects is referred to as:
A)Allocation
B)Direct tracing
C)Physical observation
D)Cost management

Question

Quizplus · Accepted Answer

The process of assigning indirect costs to specific cost objects is known as allocation. This is typically done using a predetermined allocation rate based on activity levels or other factors. Direct tracing refers to the direct assignment of costs to a specific cost object without any apportionment or allocation. Physical observation refers to the process of monitoring actual costs and activities in real time, while cost management refers to the overall process of controlling and reducing costs within an organization.

The Assignment of Indirect Costs to Cost Objects Is Referred