In performing activity analysis during the design of an activity-based costing (ABC) system, the management accountant studies:

a. The implementation problems for an ABC system.

b. The advice of operation-level managers.

c. The cost drivers and managers in the plant.

d. The resources, activities, and cost drivers in the operation.

e. The cost allocation methods applicable to the firm.

Question

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Business

18 July, 05:58

In performing activity analysis during the design of an activity-based costing (ABC) system, the management accountant studies:

a. The implementation problems for an ABC system.

b. The advice of operation-level managers.

c. The cost drivers and managers in the plant.

d. The resources, activities, and cost drivers in the operation.

e. The cost allocation methods applicable to the firm.

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Answers (1)

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Cedric Crawford · Answer 1

d. The resources, activities, and cost drivers in the operation.

Explanation:

Activity-based costing: The term "activity-based costing" is also denoted ABC, and is described as one of the different costing methods that generally identifies distinct activities in a specific organization and therefore assigns the costs related to each activity to various services and products based on the "actual consumption" by each of them. The given model assigns or indicates "indirect costs" towards "direct costs" as compared to "conventional costing".

In the question above, the correct answer is option d.