Identifying activities performed in the organization is the first step in developing activity-based product costs.Which of the following is a way to identify these activities?
A)Asking employees what they do
B)Analyzing industry averages
C)Investigating variances
D)Determining cost pools

Question

Quizplus · Accepted Answer

Asking employees what they do is a common method for identifying activities performed in the organization. Employees are typically the best source of information about what tasks they perform to produce a product or service. This can also help identify any inefficiencies or redundant activities that can be eliminated to improve overall productivity and reduce costs. Analyzing industry averages and investigating variances may provide useful information, but they are not direct methods of identifying activities. Determining cost pools is a later step in activity-based costing that requires first identifying the relevant activities.

Identifying Activities Performed in the Organization Is the First Step