Question

what cost term best fits the following descriptions? choose from the following list of terms: direct cost, indirect cost, cost object, trace, allocate, and assign. terms may be used more than once

a. anything for which a manager would like to know the cost

b. a cost that can be traced to a cost object

c. a general term for attaching any type of cost to a cost object

d. a cost that is related to a cost object, but cant be traced to it

e. the method of assigning costs that results in a less precise cost figure

f. a cost that is readily associated with a cost object

Explanation:

a. This defines the entity for which cost is measured.
b. This cost has a direct traceable link to the cost object.
c. This is the overarching term for linking costs to a cost object.
d. This cost relates to the object but can't be directly traced.
e. This method allocates costs broadly, leading to less precision.
f. This cost is easily linked to the cost object directly.

Answer:

a. cost object
b. direct cost
c. assign
d. indirect cost
e. allocate
f. direct cost