The three methods of assigning costs to cost objects are direct tracing, driver tracing, and _____.
A)observation
B)arbitration
C)assignment
D)allocation

Question

Quizplus · Accepted Answer

The three methods of assigning costs to cost objects are direct tracing, driver tracing, and allocation. Direct tracing involves directly assigning costs to the cost object. In driver tracing, costs are assigned to the cost object based on a specific activity or driver that is closely associated with the cost. Allocation involves assigning costs based on some type of allocation rule or formula, such as square footage or labor hours. Therefore, the correct answer is D) allocation.

The Three Methods of Assigning Costs to Cost Objects Are