Question

Any activity or item for which a separate cost measurement is desired by management is called a(n):

A. common cost

B. indirect cost

C. cost object

d. Direct cost

Answer 1

C) Cost Object

A cost object is anything for which costs are as a rule independently estimated. It is a key idea utilized in dealing with the expenses of a business. Here are a few sorts of cost objects:

Output-

The most widely recognized cost objects are an organization's items and administrations since it needs to know the cost of its yield for gainfulness investigation and value setting.

Operational-

A cost object can be inside an organization, for example, an office, machining task, generation line, or process. For instance, you could track the cost of outlining another item, or a client benefit call, or of modifying a returned item.

Business relationship.

A cost object can be outside of an organization - there might be a need to aggregate expenses for a provider or a client, to decide the cost of managing that element. Another minor departure from the idea is the cost of recharging a permit with an administration office.

It might be important to have a cost object keeping in mind the end goal to get value from a standard cost, or to check whether costs are sensible, or to infer the full cost of an association with another substance.