Cost Accounting - Access Package (Custom)
Cost Accounting - Access Package (Custom)
15th Edition
ISBN: 9781323174418
Author: Horngren
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.1Q

Define cost object and give three examples.

Expert Solution & Answer
Check Mark
To determine

Cost:

Cost refers to the expenses incurred by the business to earn revenue from sales, in other words cost is the amount given in order to get something.

To explain: The cost object and its examples.

Answer to Problem 2.1Q

  • Cost object refers to the object to which the costs are assigned that is product or department.
  • Examples of cost object are departments, product lines, customer and project.

Explanation of Solution

  • Direct or indirect costs are assigned based on product lines, departments, customers and anything based on type of business, these are known as cost object.
  • Cost object can be used as a cost control measure in cost accounting.
Conclusion

Hence, cost object is something to which cost is allocated for example product lines, departments and customer.

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Cost Accounting - Access Package (Custom)

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