Four Basic Steps Are Used in an ABC System

question 79

Multiple Choice

Four basic steps are used in an ABC system. List the proper order of these steps, which are currently scrambled below:
A. Identify the primary activities and estimate a total cost pool for each.
B. Allocate the costs to the cost object using the activity cost allocation rates.
C. Select an allocation base for each activity.
D. Calculate an activity cost allocation rate for each activity.

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

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Definitions:

Consumption

The action of using up a good or service, typically one that satisfies human desires or needs.

Units

Standardized quantities used to measure, count, or quantify objects or phenomena.

Good X

A placeholder term commonly used in economics to refer to a generic good or product involved in an analysis or example.

Good Y

A hypothetical product used in economics to model consumer choice, market interactions, or other economic scenarios alongside another good, typically referred to as Good X.