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The first step in activity-based costing is to __________.
a. identify the cost driver that has a strong correlation to the activity cost pool.
b. identify and classify the activities involved in the manufacture of specific products, and allocate overhead to cost pools.
c. assign overhead costs to products, using overhead rates determined for each cost pool.
d. compute the activity-based overhead rate per cost driver.

Respuesta :

Answer:

b. identify and classify the activities involved in the manufacture of specific products, and allocate overhead to cost pools.

Explanation:

  • The ABC costing allocated the overhead to identify the activity coat pools and using the related drivers that measure the activity consumed and costing involves the four steps.  
  • As the identification and the classification of the major activities that are involved in the manufacturing of the product and services and second is the identification of the cost drovers and third is the computation of the overhead rate for the each cost pool.
  • And last is the allocation of the products using the overhead rates that determine the each cost.