If a Firm Uses Activity-Based Costing to Allocate Costs, It

question 5

Multiple Choice

If a firm uses activity-based costing to allocate costs, it must:

• A) Combine costs in appropriate pools.
• B) Select appropriate cost drivers.
• C) Calculate an appropriate rate for each pool.
• D) Allocate costs based on predetermined rates for cost pools.
• E) Perform all of these steps.