Thefirst step in activity-based costing (ABC)is to
A)identify the activities that consume resources,and assign costs to those activities.
B)identify the cost driver(s)associated with each activity.
C)compute a cost rate per cost driver unit.
D)assign costs to products by multiplying the cost driver rate by the volume of cost drivers consumed by the product.

Question

Quizplus · Accepted Answer

The first step in activity-based costing is to identify the activities that consume resources and assign costs to those activities. This is done to understand the cost behavior of each activity and to allocate costs more accurately to products or services based on their consumption of those activities. Once the activities and their costs have been identified, cost drivers can be assigned to each activity, and cost rates can be calculated. Finally, costs can be assigned to products by multiplying the cost driver rate by the volume of cost drivers consumed by the product.

Thefirst Step in Activity-Based Costing (ABC)is to