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CA Intermediate · Cost and Management Accounting · Introduction to Cost and Management Accounting

In a cost accounting context, which of the following is correctly classified as a 'cost object'?

A specific product line is a cost object because it is something for which cost is separately measured. Depreciation, supervisor wages and electricity are costs that are traced or apportioned to cost objects, so they are not cost objects themselves.

  1. AThe depreciation charged on a lathe machine
  2. BA specific product line of Sundaram Auto Components for which the cost is separately measuredCorrect
  3. CThe wages paid to a supervisor
  4. DThe cost of electricity consumed in the factory

Explanation

A cost object is any item, such as a product, job, process, department or service, for which cost is separately measured. Depreciation, supervisor wages and electricity are cost items or elements that get assigned to cost objects; they are not cost objects themselves.

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