Which cost allocation concept defines overhead costs that cannot be directly traced to a single specific cost object in an economically feasible way?
APrime Costs
BTraceable Costs
CIndirect Costs
DDirect Costs
Explanation
* Indirect Costs cannot be tied directly to a specific product or cost center in a cost-effective way (e.g., factory utilities, supervisor salary).
* Direct costs (direct materials, direct labor) can be explicitly traced.
* Indirect manufacturing costs are pooled and allocated using cost drivers.
Exam Relevance
- Topic: Cost Accounting
- Subtopic: Cost Terminology

No Comments