The first step in ABC is:
A)to calculate a manufacturing overhead rate.
B)to form activity cost pools.
C)to select a cost driver for each activity cost pool.
D)to identify and classify activities.

Question

Quizplus · Accepted Answer

The first step in ABC is to identify and classify activities. This involves identifying all the activities that consume resources in the production process and grouping them into categories. Only after identifying the activities, they can be assigned to activity cost pools, selecting a cost driver for each pool, and calculating a manufacturing overhead rate. Therefore, option D is the best choice.

The First Step in ABC Is