Cost accumulation is used to:
A) Determine the cost of a particular cost object.
B) Identify and estimate opportunity costs.
C) Identify fixed and variable costs.
D) Set the selling price for a service.

Question

Quizplus · Accepted Answer

Cost accumulation is the process of collecting costs to determine the total cost of a particular cost object. The ultimate goal of cost accumulation is to determine the cost of production for a product or service, so option A is the correct choice. Identifying and estimating opportunity costs (option B) involves evaluating the benefits of one option against the costs of another, and is not related to cost accumulation. Similarly, identifying fixed and variable costs (option C) is not the same as cost accumulation, though it is related to the analysis of costs. Setting the selling price for a service (option D) also involves a more complex analysis of market factors, not simply cost accumulation.

Cost Accumulation Is Used To