Which of the following is not a step in allocating indirect costs to cost objects?
A) Multiply the allocation rate by the weight of the cost driver.
B) Trace direct costs to individual cost pools.
C) Compute an allocation rate by dividing the total cost to be allocated by the total cost driver volume.
D) All of the answers are steps in allocating indirect costs.

Question

Quizplus · Accepted Answer

Tracing direct costs to individual cost pools is not a step in allocating indirect costs. Direct costs are already assigned directly to the cost object, while indirect costs require allocation. The other three steps listed (calculating an allocation rate, multiplying the rate by the weight of the cost driver, and allocating the indirect costs to the cost object) are all part of the process of assigning indirect costs to cost objects.

Which of the Following Is Not a Step in Allocating