Activity analysis is the process of identifying appropriate cost drivers and their effects on the costs of making a product or providing a service.

Question

Quizplus · Accepted Answer

Activity analysis involves identifying the factors that drive the costs of producing a product or providing a service, such as labor, materials, and overhead expenses. By analyzing these drivers, businesses can gain insights into the most effective ways to manage costs and improve profitability.

Activity Analysis Is the Process of Identifying Appropriate Cost Drivers