In Developing an ABC System, What Is the Last Step

question 234

Multiple Choice

In developing an ABC system, what is the last step?

• A)Identify the primary activities and estimate a total cost pool for each.
• B)Select an allocation base for each activity.
• C)Allocate the costs to the cost object using the activity cost allocation rates.
• D)Calculate an activity cost allocation rate for each activity.

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Definitions:

Growing Perpetuity

A type of investment that provides an infinite series of cash flows that grow at a consistent rate indefinitely.

Generalization

The process of forming general concepts from specific instances by abstracting common properties.

Expected Growth Rate

The anticipated rate at which an investment, company, or economy will grow in a specific period.

Required Return

The minimum expected return by investors for investing in a particular security or project, considering the risk involved.