Fixed and variable costs may be allocated to a cost object.

Question

Quizplus · Accepted Answer

Yes, both fixed and variable costs can be allocated to a cost object. Cost objects are items, products, or activities that incur costs in a business, and these costs can include both fixed costs (such as rent, salaries, and insurance) and variable costs (such as raw materials and utilities). By allocating these costs to a cost object, businesses can better understand the true cost of producing a particular product or service.

Fixed and Variable Costs May Be Allocated to a Cost