Which of the following is the secondstep in activity based costing?
A)Identify the activities that consume resources and assign costs to those activities.
B)Identify the cost drivers associated with each activity.
C)Compute a cost rate per cost driver unit.
D)Assign cost to products by multiplying the cost driver rate times the volume of cost driver consumed by the product.

Question

Quizplus · Accepted Answer

The second step in activity based costing is to identify the cost drivers associated with each activity. This step involves determining the factors that drive the cost of each activity, such as the number of machine hours or the amount of materials used. Only after this step is completed can the cost rate per cost driver unit be computed, followed by the assignment of costs to products based on the volume of cost driver consumed by each product.

Which of the Following Is the Secondstep in Activity Based