Which cost assignment method would likely assign the cost of heating in a plant that makes chairs and go-carts when the chair product line is the cost object?
A)driver tracing
B)direct tracing
C)allocation
D)arbitration

Question

Quizplus · Accepted Answer

Allocation is used for assigning indirect costs, like heating, to different cost objects when direct tracing is not feasible. Since heating benefits the entire plant and not just the chair product line, it would be allocated based on some basis, such as square footage or machine hours, rather than directly traced.

Which Cost Assignment Method Would Likely Assign the Cost of Heating