Final answer:
Cost tracing assigns direct costs, cost allocation assigns indirect costs, cost-allocation base can be financial or nonfinancial, and a cost object can be a product or department.
Step-by-step explanation:
A) Cost tracing is the process of assigning direct costs to a cost object, such as a product, department, or project. It involves directly tracing the costs incurred to the specific cost object.
B) Cost allocation, on the other hand, is the process of assigning indirect costs to a cost object. These indirect costs cannot be easily traced to a specific cost object and are allocated based on a cost-allocation base, which can be financial (e.g., labor hours) or nonfinancial (e.g., number of units produced).
C) A cost-allocation base can be either financial or nonfinancial, depending on the nature of the indirect costs and the most appropriate measure to allocate them.
D) A cost object can be a product, department, or geographic territory. It is something for which costs are measured and tracked. Both products and departments can be cost objects, depending on the context and purpose of the costing system.