Question

Which is not a step in activity-based costing?

Group of answer choices

identify the cost driver(s) associated with each activity

identify the activities performed by the organization

compute a cost rate per production

assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product

Answer 1

Answer: identify the cost driver(s) associated with each activity

Explanation:

identify the cost driver(s) associated with each activity is not a step in activity based costing.

7 Steps in Activity Bases Costing are as follows:

Step 1: Identify the products that are the chosen cost objects.
Step 2: Identify the direct costs of the products products.
Step 3: Select the activities and cost-allocation bases to use for allocating indirect costs to the products.
Step 4: Identify the indirect costs associated with each cost allocation base (activity).
Step 5: Compute the rate per unit of each cost-allocation base (activity) used to allocate indirect costs to the products.
Step 6: Compute the indirect costs allocated to the products.
Step 7: Compute the total costs of the products by adding all direct and indirect costs assigned to the products.

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