A well designed activity-based costing system starts with
A)identifying the activity-cost pools.
B)computing the activity-based overhead rate.
C)assigning manufacturing overhead costs for each activity cost pool to products.
D)analyzing the activities performed to manufacture a product.

Question

Quizplus · Accepted Answer

A well designed activity-based costing system starts with analyzing the activities performed to manufacture a product. This involves identifying the various activities and the costs associated with each activity. Once this analysis is complete, it becomes easier to identify and classify the activity-cost pools, compute the activity-based overhead rate, and assign manufacturing overhead costs for each activity cost pool to products. Therefore, option D is the best choice.

A Well Designed Activity-Based Costing System Starts with