The process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service is called ________.
A) account analysis
B) activity analysis
C) cost analysis
D) product analysis

Question

Quizplus · Accepted Answer

Activity analysis is the process of identifying appropriate cost drivers and understanding how they influence the costs of producing a product or service. This analysis helps to accurately allocate costs to products or services and identify areas where costs can be reduced or eliminated. Account analysis, cost analysis, and product analysis may be components of activity analysis but not the full process.

The Process of Identifying Appropriate Cost Drivers and Their Effects