Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 3

What is the difference between cost allocation and cost assignment?

Step 1 of 2

Cost:

Cost refers to the expenditure incurred to manufacture product or provide a service. Since a number of cost are incurred during production process these costs are required to be bifurcated based on their usage, frequency etc.

Costs are primarily divided into direct cost and indirect cost.