In performing activity analysis during the design of an activity-based costing system (ABC), the management accountant studies:
A)The cost drivers and managers in the plant.
B)The advice of operation-level managers.
C)The resources, activities and cost drivers in the operation.
D)The cost allocation methods applicable to the firm
E)The implementation problems for an ABC system.

Question

Quizplus · Accepted Answer

Activity analysis involves identifying and understanding the resources, activities, and cost drivers of a particular operation. This information is essential in developing an effective ABC system, which aims to allocate costs to products or services based on the resources and activities required to produce them. Option A is partially correct but not complete, option B may be helpful but not the focus, option D is irrelevant, and option E is not part of the activity analysis process.

In Performing Activity Analysis During the Design of an Activity-Based