Activity analysis is used to ________.
A)identify relevant costs for decision making
B)classify costs
C)identify an appropriate cost driver
D)predict future costs

Question

Quizplus · Accepted Answer

Activity analysis is used to identify an appropriate cost driver, which is a factor that causes changes in the cost of an activity. By identifying the cost driver, managers can better understand the relationship between the cost and the activity, and make more informed decisions about how to allocate resources. While activity analysis may help inform predictions of future costs, its primary purpose is to identify the cost driver. It may also indirectly relate to classifying costs or identifying relevant costs for decision making, but these are not its primary objectives.

Activity Analysis Is Used to ________