ascertainment of costs
allocation of costs
apportion of costs
distribution of costs
Answer is Right!
Answer is Wrong!
The correct answer is: A. ascertainment of costs.
Costing is the process of determining the cost of a product or service. It involves identifying all the costs that are incurred in producing the product or service, and then allocating those costs to the product or service in a way that is fair and accurate.
There are a number of different costing methods that can be used, depending on the specific circumstances. Some common costing methods include:
- Direct costing: This method allocates only direct costs to products or services. Direct costs are those that can be easily traced to a particular product or service, such as the cost of materials and labor.
- Absorption costing: This method allocates both direct and indirect costs to products or services. Indirect costs are those that cannot be easily traced to a particular product or service, such as the cost of rent and utilities.
- Variable costing: This method allocates only variable costs to products or services. Variable costs are those that change in proportion to the volume of production, such as the cost of materials.
- Fixed costing: This method allocates only fixed costs to products or services. Fixed costs are those that do not change in proportion to the volume of production, such as the cost of rent.
The costing method that is used will depend on a number of factors, such as the type of product or service being produced, the level of detail required, and the cost of collecting the data.
The other options are incorrect because they do not accurately describe the process of costing.
- Option B: allocation of costs is the process of assigning costs to cost objects. A cost object is anything that incurs costs, such as a product, a service, or a department.
- Option C: apportion of costs is the process of assigning costs to cost objects in a way that is fair and equitable.
- Option D: distribution of costs is the process of assigning costs to cost objects in a way that is consistent with the way in which the costs are incurred.