An Activity-Based Costing System Is Developed in Four Steps

question 90

Multiple Choice

An activity-based costing system is developed in four steps. a. Compute the allocation rate for each activity
B. Identify activities and estimate their total costs
C. Identify the cost driver for each activity and then estimate the quantity of each driver's allocation base
D. Allocate the indirect costs to the cost object
Which of the following is the correct order of performing these steps?

• A)a, b, c, d
• B)c, a, b, d
• C)b, c, a, d
• D)b, a, c, d

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Definitions:

Slide

An error in which the entire number is moved one or more spaces to the right or the left, such as writing $542.00 as $54.20 or $5,420.00.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Posting

The act of recording financial transactions in the ledger of an accounting system.

Transaction

An agreement or exchange between two parties that involves the buying, selling, or trading of goods, services, or financial instruments.