Which of the Following Is Not Part of the Process

question 67

Multiple Choice

Which of the following is not part of the process used to assign costs in an ABC system?

• A) Identify activities
• B) Differentiate value-adding and non-value-adding activities
• C) Identify the relevant cost object
• D) Assign costs to activity-based pools

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Definitions:

Overapplied

A situation where the allocated amount of indirect costs exceeds the actual amount incurred.

Underapplied

A situation where the applied manufacturing overhead is less than the actual manufacturing overhead incurred, indicating that the costs have not been fully allocated.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate overhead costs to products or job orders based on a chosen activity base.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods or provision of services.