What Is Cost Allocation

question 123

Multiple Choice

What is cost allocation?

• A)A function of cost tracing
• B)The process of determining the actual cost of the cost object
• C)The assignment of indirect costs to the chosen cost object
• D)The process of tracking both direct and indirect costs associated with a cost object

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Definitions:

Consumer Price Index

A metric that assesses the weighted average cost of a collection of consumer goods and services, serving as a gauge for inflation levels.

Producer Price Index

A measure of the average changes in prices received by domestic producers for their output.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP to adjust for inflation.

Gini Coefficient

The Gini coefficient is a measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality), used to assess wealth distribution.