The following tasks are associated with an activity-based costing system:
1- Assignment of cost to products
2- Calculation of pool rates
3- Identification of cost drivers
4- Identification of cost pools
Which of the following choices correctly expresses the proper order of the preceding tasks?
A) 1, 2, 3, 4.
B) 2, 4, 1, 3.
C) 3, 4, 2, 1.
D) 4, 2, 1, 3.
E) 4, 3, 2, 1.

Question

Quizplus · Accepted Answer

The correct sequence for implementing an activity-based costing system is first identifying the cost pools (4), then identifying the cost drivers (3) associated with each pool, calculating the pool rates (2) based on those drivers, and finally assigning the cost to products (1) using those rates.

The Following Tasks Are Associated with an Activity-Based Costing System