Which of the following is not a step accountants must follow in activity-based costing?
A)Identify the activities that consume resources and assign costs to them.
B)Identify the cost drivers associated with each activity.
C)Compute a cost rate per cost driver.
D)Compute the variance between the estimated cost driver and the actual cost driver.

Question

Quizplus · Accepted Answer

While computing variances is an important part of management accounting, it is not a step in activity-based costing. The other three steps listed (identifying and assigning costs to activities, identifying cost drivers, and computing a cost rate per cost driver) are all necessary components of activity-based costing.

Which of the Following Is Not a Step Accountants Must