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:

Majority Shareholder

An entity or individual that owns more than 50% of a company's shares, giving them control over the company's decisions.

Company Stock

Company stock represents shares of ownership in a corporation, giving holders a claim on part of the company's assets and profits.

Duty of Loyalty

An obligation of a fiduciary to act in the best interests of the principal or entity he/she is bound by duty to.

Bondholders

Investors or entities that own bonds issued by corporations or governments, holding a right to receive fixed interest payments.