Activity analysis is an important approach to operations control and the successful implementation of activity-based cost management (ABCM). Which of the following procedures is not part of activity analysis?
A) Chart, from start to finish, the activities used to complete the product or service.
B) Classify all activities as either value-added or nonvalue-added activities.
C) Identify the process objectives as defined by what the customer desires from the process.
D) Compute the predetermined rate per activity by dividing the total cost pool by the total cost drivers.

Question

Quizplus · Accepted Answer

Computing the predetermined rate per activity is part of cost allocation, not activity analysis. Activity analysis focuses on understanding and classifying activities, not on cost calculations.

Activity Analysis Is an Important Approach to Operations Control and the Successful