Simple costing systems that allocate indirect costs are most likely to use which of the following steps first?
A)Identify the products that are the chosen cost objects.
B)Identify the direct costs of the products.
C)Select the cost-allocation bases to use for allocating indirect (or overhead)costs to the products to identify the direct costs of the products.
D)Identify the indirect costs associated with each cost-allocation base.
E)Compute the rate per unit of each cost allocation base.

Question

Quizplus · Accepted Answer

Identifying the products that are the chosen cost objects is the first step in simple costing systems before allocating indirect costs, as it defines what the costs will be assigned to.

Simple Costing Systems That Allocate Indirect Costs Are Most Likely