sales allocation
cost tracing
cost allocation
sales tracing
Answer is Right!
Answer is Wrong!
The correct answer is: B. cost tracing
Cost tracing is the process of identifying and assigning direct costs to cost objects. Direct costs are those that can be easily and specifically traced to a particular cost object. For example, the cost of materials used to produce a product is a direct cost of that product.
Sales allocation is the process of assigning indirect costs to cost objects. Indirect costs are those that cannot be easily and specifically traced to a particular cost object. For example, the cost of the plant manager’s salary is an indirect cost of a product.
Cost allocation is the process of assigning both direct and indirect costs to cost objects.
Sales tracing is not a valid accounting term.