Which of the Following Is Not a Step Involved in Activity-Based

question 100

Multiple Choice

Which of the following is not a step involved in activity-based costing?

• A) Identify the activities that consume resources and assign costs to those activities.
• B) Determine how to reduce the costs of making products by cutting activities.
• C) Assign costs to products by multiplying the cost driver rate by the volume of cost driver units consumed by the product.
• D) Compute a cost rate per cost driver unit or transaction.

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Definitions:

Service Inventories

Assets held by a service business to support service delivery, including physical items, information, and capacities.

Cycle-Counting Personnel

Employees responsible for periodically counting inventory items to ensure accuracy without interrupting daily operations.

Inventory Holding Cost

The total cost incurred by holding inventory, including storage, insurance, spoilage, and opportunity costs.

Carrying Costs

Expenses associated with maintaining inventory, including storage, insurance, and opportunity costs.