The Following Four Steps Are Necessary in Order to Use

question 69

Multiple Choice

The following four steps are necessary in order to use an activity-based costing system:
1) Calculate 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) 3,1,2,4
• B) 2,1,3 4
• C) 2,3,1,4
• D) 1,2,3,4

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Definitions:

Npvgo

Net Present Value of Growth Opportunities; an approach used to evaluate the value of investment projects or strategies based on their future growth possibilities.

Rate Of Return

A measure of the profitability or potential profitability of an investment, expressed as a percentage of the original investment.

Annual Dividend

Annual Dividend is the total dividend payment a shareholder receives from a company over a one-year period, often paid quarterly.