Question

________ is NOT considered a step in activity-based costing. A : Allocating overhead costs to activity cost pools B : Identifying a single overhead rate as the predetermined overhead rate C : Assigning overhead allocated to the activity cost pools to products using cost drivers D : Identifying and classifying the major activities involved in the manufacture of specific products.

Answer 1

Answer:

c. identify a single overhead rate as the predetermined overhead rate

Explanation:

Costs are categorized in an ABC system based on the various types of cost drivers used. ABC systems usually use a four-level cost hierarchy. These cost drivers differ between the indirect cost and the product or service in their relationship.

Step 1: Recognize the goods that are the objects that are chosen.                  Step 2: Identify Identify the service direct costs.                                         Step 3: Choose the tasks and value allocation bases to be used to assign indirect costs to the products.                                                                       Step 4: Recognize the indirect costs connected with each base (activity) cost distribution.                                                                                       Step 5: Calculate the rate of each cost-allocation basis per unit used to allocate indirect costs to the goods.                                                          Step 6: Calculate the indirect costs of the goods.                                    Step 7: By combining both direct and indirect costs allocated to the goods, measure the total cost of the goods.