The First Step in Activity-Based Costing Is to

question 38

Multiple Choice

The first step in activity-based costing is to

• A) assign overhead costs to products, using overhead rates determined for each cost pool.
• B) compute the activity-based overhead rate per cost driver.
• C) identify and classify the activities involved in the manufacture of specific products, and allocate overhead to cost pools.
• D) identify the cost driver that has a strong correlation to the activity cost pool.

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Definitions:

Partnership

A legal arrangement in which two or more individuals share ownership of a business, including its profits, losses, and responsibilities.

Partnership Liabilities

Obligations that arise during the course of a partnership's operation that all partners are typically jointly and severally responsible for.

Liquidated Assets

are assets that have been converted into cash or cash equivalents by selling them on the open market.

Wrongful Dissolution

The improper termination of a partnership or corporate entity in violation of agreements or legal provisions.