The steps involved in determining the full cost of a cost object are listed below (in no particular order).
A . determine the indirect cost rate for each cost driver
B . identify the cost object
C . identify cost pools and cost drivers
D . allocate indirect costs to the cost object

The correct order for carrying out these steps is:
A) C, B, D, A.
B) A, B, C, D.
C) B, C, A, D.
D) D, C, B, A.

Question

The steps involved in determining the full cost of a cost object are listed below (in no particular order).
 A . determine the indirect cost rate for each cost driver 
 B . identify the cost object 
 C . identify cost pools and cost drivers 
 D . allocate indirect costs to the cost object

The correct order for carrying out these steps is:
A) C, B, D, A.
B) A, B, C, D.
C) B, C, A, D.
D) D, C, B, A.

Quizplus · Accepted Answer

The correct order for determining the full cost of a cost object is first to identify the direct costs (option B), then allocate the indirect costs (option C), determine the overhead costs (option A), and lastly, determine the total cost (option D). Therefore, the correct order is B, C, A, D, which matches with option C.

The Steps Involved in Determining the Full Cost of a Cost