COMMERCE 2AB3 Final: ch02tif
27 Nov 2018
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Chapter 2: an introduction to cost terms and purposes. Products, services, departments, and customers may be cost objects. True/false: costs are accounted for in two basic stages: assignment followed by accumulation, actual costs and budgeted costs are two different terms referring to the same thing. Costs are accounted for in two basic stages: accumulation followed by assignment. Budgeted costs are what is planned before the beginning of the accounting period, while actual costs are those costs compiled at the end of the accounting period. The same cost may be direct for one cost object and indirect for another cost object: assigning direct costs poses more problems than assigning indirect costs. Tracing direct costs is quite straightforward, whereas assigning indirect costs to a number of different cost objects can be very challenging. Improvements in information-gathering technologies are making it possible to trace more costs as direct. Answer: true: misallocated indirect costs may lead to promoting products that are not profitable.
