Define cost tracing, cost allocation, allocation base

Assignment Help Managerial Accounting

Reference no: EM133381306

Questions:

1. Why are indirect costs not directly traced to cost objects in the same way as direct costs?
2. Define cost tracing, cost allocation, allocation base and cost driver.
3. Distinguish between arbitrary and cause-and-effect allocations.
4. Explain how cost information differs for profit measurement/inventory valuation requirements compared with decision-making requirements.
5. Explain why cost systems should differ in terms of their level of sophistication.

Reference no: EM133381306

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