What is the first step in the seven-step guideline for ABC systems?
A)Identify and trace the direct costs to the cost objects (outputs).
B)Identify the outputs that are represented by cost objects.
C)Identify and select the activities,associated activity-cost drivers and activity-cost pools to allocate the costs to outputs.
D)Identify the indirect costs for each resource-cost pool and associated resource-cost drivers to allocate the costs to activity-cost pools.

Question

Quizplus · Accepted Answer

The first step in implementing an activity-based costing system is to identify the outputs that will be represented by cost objects. This involves identifying the products, services, or other outputs that will be analyzed in terms of their costs. Only after determining the outputs can the costs be traced and allocated to the appropriate cost objects.

What Is the First Step in the Seven-Step Guideline for ABC