Which of the following best describes cost allocation? A. the assigning of direct costs to the chosen cost object. B. a factor that links in a systematic way an indirect cost or group of indirect costs to a cost object. C. a grouping of individual cost items. D. the assigning of indirect costs to the chosen cost object.

Question

Business

Lyric Barber

5 October, 04:13

Which of the following best describes cost allocation? A. the assigning of direct costs to the chosen cost object. B. a factor that links in a systematic way an indirect cost or group of indirect costs to a cost object. C. a grouping of individual cost items. D. the assigning of indirect costs to the chosen cost object.

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Mac · Answer 1

D. the assigning of indirect costs to the chosen cost object.

Explanation

Cost allocation is best described as the assigning of indirect costs to the chosen cost object.

Cost allocation is a methodology in financial reporting that is used to spread or share common costs among departments, services or inventory items. it has to do with the identification of common costs and apportioning them among cost objects that have jointly benefited from them.