The First Step in Activity-Based Costing Is to

question 45

Multiple Choice

The first step in activity-based costing is to

• A)assign manufacturing overhead costs for each activity cost pool to products.
• B)calculate the activity-based overhead rate per cost driver.
• C)identify and classify the major activities involved in the manufacture of specific products.
• D)identify the cost driver that has a strong correlation to the activity cost pool.

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Definitions:

Utilities

Services provided by public utility companies, such as electricity, water, and gas, essential for daily living and maintaining a standard of living.

Four Utilities

Refers to the satisfaction or value that customers receive from a product, encompassing form, time, place, and possession utilities.

Marketing Creates

The process through which marketing efforts lead to the creation of value, demand, and brand identity.

Possession

The state or fact of owning, controlling, or having an object, property, or asset.