The first step,from those below,in the process of allocating indirect costs is to:
A) identify a cost driver that has a strong correlation to the cost pool.
B) calculate the indirect cost rate per cost driver.
C) determine the number of indirect cost pools.
D) allocate the indirect costs to each cost object.

Question

Quizplus · Accepted Answer

The first step in allocating indirect costs is to determine the number of indirect cost pools. This involves identifying specific overhead costs that can be grouped together based on similar cost drivers or characteristics. Once these cost pools are established, the indirect costs can then be allocated to each cost object using an appropriate allocation method. The other options listed (identifying a cost driver, calculating an indirect cost rate, and allocating indirect costs) are subsequent steps in the allocation process.

The First Step,from Those Below,in the Process of Allocating Indirect