An allocated cost is a(n)________ assigned to a cost object using a ________.
A) direct cost; cost-allocation base
B) indirect cost; cost-allocation base
C) direct cost; cost pool
D) indirect cost; cost pool

Question

Quizplus · Accepted Answer

An allocated cost is an indirect cost that is assigned to a cost object using a cost-allocation base. Direct costs, on the other hand, are costs that can be traced directly to a cost object. Cost pools are groups of individual indirect costs that are combined together to allocate a cost to a cost object. Therefore, option B is the correct answer.

An Allocated Cost Is A(n)________ Assigned to a Cost Object