How Are Direct and Overhead Costs Assigned to Cost Objects $\begin{array}{llcc}\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}\end{array}$

question 59

Multiple Choice

How are direct and overhead costs assigned to cost objects under activity based costing systems?
$\begin{array}{llcc}\underline{\text {Direct Costs}}&\underline{\text { Overhead Costs}}\end{array}$

a. $\begin{array}{ll}\text { Allocate } &\quad \text { Trace }\end{array}$


b. $\begin{array}{llcc} \text { Trace }&\quad\quad\text { Allocate }\end{array}$


c. $\begin{array}{llcc}\text { Allocate }&\quad\text { Allocate }\end{array}$


d. $\begin{array}{llcc}\text { Trace }&\quad\quad\text { Trace }\end{array}$

• A) A
• B) B
• C) C
• D) D

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.

Price Range

The spectrum of prices at which a particular product is sold in the market, from the lowest to the highest.

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of consumers to price changes.

Substitutes

Products or services that can replace each other in use or consumption, thereby affecting consumer choices and market dynamics.