The second step in the preparation of activity-based costing data is to
A)calculate activity cost pool rates.
B)develop activity cost pools.
C)allocate costs to products.
D)calculate the unit product cost.

Question

Quizplus · Accepted Answer

The second step in activity-based costing is to develop activity cost pools. This involves identifying and grouping together the activities that drive costs in the organization. Only after these cost pools have been developed can costs be allocated to products based on their consumption of each activity. Calculation of activity cost pool rates and determination of unit product cost comes later in the ABC process.

The Second Step in the Preparation of Activity-Based Costing Data