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:

Prepaid Rent Expense

An account representing rent payments made in advance for future periods, which is gradually expensed over the benefit period.

Contra-Asset

An asset account where the balance is expected to be a debit balance but is instead a credit balance, such as accumulated depreciation.

Worksheet

A spreadsheet used by accountants to prepare adjusting entries, financial statements, and to ensure the accounts balance before closing.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis and is proficient in financial reporting and regulation.