Costing systems want to measure the full cost of a cost object.What is full cost?
A) Total indirect costs plus direct costs.
B) Allocated indirect costs plus unallocated indirect costs.
C) Direct cost plus allocated indirect costs.
D) All costs added together.

Question

Quizplus · Accepted Answer

Full cost refers to the total cost associated with a cost object, which includes both direct costs and allocated indirect costs. Direct costs are those that can be directly traced to a cost object, while allocated indirect costs are those overheads that are distributed to cost objects based on a predetermined allocation method.

Costing Systems Want to Measure the Full Cost of a Cost