In a costing system:

Question

Quizplus · Accepted Answer

A cost-allocation base can be either financial (such as labor hours, machine hours, or materials cost) or non-financial (such as the number of units produced or the square footage of the facility). Option A is incorrect because a cost object can be any item for which costs are measured, such as a product, service, customer, department, or geographic location. Option B is incorrect because indirect costs are allocated, not traced. Option C is incorrect because direct costs are traced to directly to cost objects, not allocated.

In a Costing System