Question

Allocation is the assignment of

a. direct costs to cost objects.
b. costs accomplished by physical observation.
c. indirect costs based on convenience or assumed linkage.
d. costs using cost drivers.

Answer 1

Allocation is the assignment of costs to cost objects. This involves assigning both direct costs and indirect costs. Indirect costs are allocated based on convenience or assumed linkage using cost drivers.

Step-by-step explanation:

Allocation is the assignment of costs to cost objects. This involves assigning both direct costs, which are costs that can be directly traced to a specific cost object, and indirect costs, which are costs that cannot be easily and accurately traced to a specific cost object. Indirect costs are allocated based on convenience or assumed linkage using cost drivers.