CIMA BA2 · Chapter 1 · Question 8 of 12
In a management accounting system, what is meant by a 'cost object'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Anything for which a separate measurement of cost is required, such as a product, service, customer or department
Explanation
A cost object is any item for which costs are separately measured, for example a product, a job, a customer, a distribution channel or a department. A location where costs are collected is a cost centre, and expenditure that cannot be traced to a product is an indirect cost.
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