The Following Four Steps Are Necessary in Order to Use

question 61

Multiple Choice

The following four steps are necessary in order to use an activity-based costing system:
1) Compute the allocation rate for each activity.
2) Identify activities and estimate their total costs.
3) Identify the cost driver for each activity and then estimate the quantity of each driver's allocation base.
4) Allocate the indirect costs to the cost object.
In what order are these steps performed?

• A) 1,2,3,4
• B) 3,1,2,4
• C) 2,3,1,4
• D) 2,1,3,4

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Definitions:

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