The first step in developing an activity-based costing system is to identify the activities that will be used to assign the manufacturing overhead.

Question

Quizplus · Accepted Answer

This statement is true. The first step in developing an activity-based costing system is to identify the activities that will be used to assign the manufacturing overhead costs. This involves identifying all the tasks involved in the manufacturing process, including both value-added and non-value-added activities, and determining the cost drivers that are used to allocate the overhead costs to each activity. Only after this step is completed can the actual overhead costs be assigned to products or services based on their usage of these activities.

The First Step in Developing an Activity-Based Costing System Is