To determine the cost of a product,which of the following are followed?
A) first step, cost assignment and second step, cost allocation
B) first step, cost accumulation and second step, cost assignment
C) first step, cost allocation and second step, cost apportionment
D) first step, cost absorption and second step, cost attribution

Question

Quizplus · Accepted Answer

The process of determining the cost of a product involves first accumulating all the costs associated with its production and then assigning those costs to the product. Therefore, the first step is cost accumulation and the second step is cost assignment. Option A is incorrect as cost allocation and cost assignment are the same thing. Option C is incorrect as cost apportionment involves dividing costs among different departments or products based on a predetermined formula, whereas cost assignment involves identifying and assigning costs to a specific product. Option D is incorrect as cost attribution is not a commonly used term in cost accounting.

To Determine the Cost of a Product,which of the Following