Cost tracing:
A)describes the assignment of direct costs to a particular cost object.
B)is the cost incurred which is a predicted or forecasted cost.
C)is the collection of data in some organized way.
D)is used to describe the assignment of indirect costs to a particular cost object.
E)encompasses both cost tracing and allocating indirect costs to a cost object.

Question

Quizplus · Accepted Answer

Cost tracing specifically refers to the assignment of direct costs to a particular cost object.

Answer: E
 Cost tracing includes the assignment of direct costs, while cost allocation relates to the assignment of indirect costs to a cost object. Therefore, E encompasses both cost tracing and allocating indirect costs to a cost object.

Cost Tracing