A Factor Having a "Cause-And-Effect" Relationship with a Cost Object

question 58

Multiple Choice

A factor having a "cause-and-effect" relationship with a cost object is called a(n) :

• A) cost driver.
• B) allocation base.
• C) direct cost.
• D) indirect cost.

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Definitions:

Charge a Price

The act of assigning a monetary value to a product or service that customers must pay to obtain it.

Marginal Cost

is the cost incurred by producing one additional unit of a product or service.

Profits

The financial gain made in a transaction or operation, calculated as the difference between revenue and expenses.

Firm

A business organization, such as a corporation or partnership, that sells goods or services in exchange for revenue.