How are direct and overhead costs assigned to cost objects under activity based costing systems?
$\begin{array}{llcc}
\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}
\end{array}$

a.$\begin{array}{ll}
\text { Allocate } &\quad \text { Trace }
\end{array}$

b.$\begin{array}{llcc}
\text { Trace }&\quad\quad\text { Allocate }
\end{array}$

c.$\begin{array}{llcc}
\text { Allocate }&\quad\text { Allocate }
\end{array}$

d.$\begin{array}{llcc}
\text { Trace }&\quad\quad\text { Trace }
\end{array}$

A) A
B) B
C) C
D) D

Question

How are direct and overhead costs assigned to cost objects under activity based costing systems? 
$\begin{array}{llcc}
\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}
\end{array}$

a.$\begin{array}{ll}
\text { Allocate } &\quad \text { Trace }
\end{array}$

b.$\begin{array}{llcc}
 \text { Trace }&\quad\quad\text { Allocate }
\end{array}$

c.$\begin{array}{llcc}
\text { Allocate }&\quad\text { Allocate }
\end{array}$

d.$\begin{array}{llcc}
\text { Trace }&\quad\quad\text { Trace }
\end{array}$

A) A
B) B
C) C
D) D

Quizplus · Accepted Answer

Direct costs are traced to cost objects because they can be directly linked to the production of specific goods or services. Overhead costs are allocated to cost objects using activity-based costing to more accurately distribute costs based on actual activities that drive costs.

How Are Direct and Overhead Costs Assigned to Cost Objects Direct Costs‾ Overhead Costs‾\begin{array}{llcc}\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}\end{array}Direct Costs​​ Overhead Costs​​

How Are Direct and Overhead Costs Assigned to Cost Objects $\begin{array}{llcc}\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}\end{array}$