What Is the Last Step in Developing an ABC System

question 34

Multiple Choice

What is the last step in developing an ABC system?

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

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Definitions:

Likelihood of Breakdown

The probability or chance that a system or component will fail to perform its intended function.

Component Reliability

A measure of the likelihood that a component will perform its required function under specified conditions for a certain period without failure.

Low-Intensity Bulbs

Light bulbs that emit a lower level of brightness compared to standard lighting options, often used to save energy.

FR(%)

An abbreviation possibly referring to Financial Ratio or Failure Rate, both of which quantify different business or operational metrics.