What is the last step in developing an activity-based costing system?
A) Estimate the total quantity of the cost driver.
B) Estimate the total indirect costs of each activity.
C) Identify the activities.
D) Allocate costs to the cost object.

Question

Quizplus · Accepted Answer

The last step in developing an activity-based costing system is to allocate costs to the cost object, which is the final stage where the indirect costs of each activity are assigned to the cost object based on the consumption of cost drivers. Therefore, option D is the correct answer. Option A, estimating the total quantity of the cost driver, is the first step in ABC system development. Option B, estimating the total indirect costs of each activity, is the second step. Option C, identifying the activities, is the third step in the system development.

What Is the Last Step in Developing an Activity-Based Costing