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 mangers.
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

In performing activity analysis in the design of an ABC system, the management accountant studies the resources, activities, and cost drivers in the operation. This includes identifying and understanding the various activities that take place, the resources required to perform those activities, and the cost drivers that cause specific costs to be incurred. By analyzing this information, the accountant can determine which activities are most costly and identify opportunities to reduce costs through process improvements or other measures. Therefore, the best choice is C.

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