CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers
Which of the following statements about a cost object is correct?
A cost object can be any item whose cost is separately measured, including a product, service, customer or project. It is not limited to physical goods or departments, and it differs from a cost driver, which is the factor that causes costs to change.
- AA cost object can be a product, a service, a customer or a projectCorrect
- BA cost object must always be a physical product made in the factory
- CA cost object is the same as a cost driver
- DA cost object can only be a department or location
Explanation
Cost objects include products, services, customers, projects and departments, so the first statement is correct. A cost driver is the cause of cost, not the item costed. Limiting cost objects to physical products or to departments is too narrow.
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