Activity-Based Costing Involves Four Steps: (1)identify Activities and the Costs

question 184

True/False

Activity-based costing involves four steps: (1)identify activities and the costs they cause,(2)group similar activities into cost pools,(3)determine an activity rate for each activity cost pool,and (4)allocate overhead costs to products using those activity rates.

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Definitions:

Realized Profits

The gains earned and received from the sale of assets or investments.

Tax Rate

The rate at which a person or company is taxed by the state.

Unrealized

Referring to profits or losses that have occurred on paper due to changes in the value of assets or investments but have not been actualized through a sale or transaction.

Intercompany Profits

Earnings generated from transactions between divisions or subsidiaries within the same corporation, which may be eliminated in consolidated financial statements.