The four steps used to allocate producing department activity cost pools using t

ID: 2370906 • Letter: T

Question

The four steps used to allocate producing department activity cost pools using the ABC approach are what?

A) step 1: divide the costs in each producing department

step 2: trace the direct costs to the appropriate products or services.

step 3: determine the key components of the system

step 4: calculate and interpret the ABC info

B) step1:divide the costs in each producing department

step 2: develope the relationships between recources, activities, and cost objects

step 3: apply variable costs on the basis of the actual amount of the cost allocation base

step 4:calculate and interpret the new ABC info

C) step 1: determine key components of the system

step 2: develop the relationships between resources, activities, and cost objects

step 3: collect relevent data concerning costs and the physical flow of cost allocation base units amount activities

step 4:calculate and interpret the new ABC info

D) step 1: collect relevent data concerning costs

step 2: select cost pools and related cost allocation bases in each production department and assign departmental costs to the appropriate cost pool

step 3: apply fixed costs on the basis of the budgeted amount of the cost allocation base

step 4: calculate and interpret the new ABC info.

Hi,

Option C is correct.

Thanks.

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