What Is the Second Step in the Seven-Step Guideline for ABC

question 104

Multiple Choice

What is the second step in the seven-step guideline for ABC systems?

• A)Identify and trace the direct costs to the cost objects (outputs).
• B)Identify the outputs that are represented by cost objects.
• C)Identify and select the activities,associated activity-cost drivers and activity-cost pools to allocate the costs to outputs.
• D)Identify the indirect costs for each resource-cost pool and associated resource-cost drivers to allocate the costs to activity-cost pools.

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Definitions:

Operating Cash Flow

The cash generated from a company's normal business operations, indicating whether a company is able to maintain or grow its operations.

CCA Half-year Rule

A regulation in Canadian tax law allowing only half of the normal capital cost allowance deduction in the year of acquisition of a depreciable asset.

CRA

Canada Revenue Agency; responsible for administering tax laws for the Government of Canada and for most provinces and territories.

Depreciate

The process of allocating the cost of a tangible asset over its useful life, reflecting its decrease in value over time.