Which of the following steps are part of the Activity-Based Costing model?
A) Identify key activities that drive overhead costs
B) Assign overhead costs to activity cost pools
C) Allocate costs evenly to products or units
D) Allocate costs to products or units based on driver usage
E) A, B, and D

Question

Quizplus · Accepted Answer

Activity-Based Costing (ABC) involves identifying the activities that incur overhead costs (A), assigning these overhead costs to activity cost pools (B), and then allocating the costs to products or units based on the extent to which each product or unit uses the activities (D). This method does not involve allocating costs evenly to products or units (C), which is a characteristic of traditional costing methods.

Which of the Following Steps Are Part of the Activity-Based