A cost system determines the cost of a cost object by:
A)assigning and then accumulating costs.
B)assigning costs.
C)accumulating costs.
D)accumulating and then assigning costs.

Question

Quizplus · Accepted Answer

The cost system first accumulates the costs and then assigns them to the cost object to determine its total cost. This process involves identifying the direct and indirect costs associated with the object and allocating them based on a predetermined method, such as activity-based costing or job order costing. Therefore, option D is correct as it involves both accumulating and assigning costs.

A Cost System Determines the Cost of a Cost Object