COST ACCOUNTING
ACTIVITY BASED MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The first step of the simple ABC system is to identify the major OH activities and determine the total (budgeted) cost of each activity.
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True
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False
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Explanation:
Detailed explanation-1: -Step 1: Identify the products that are the chosen cost objects. Step 2: Identify the direct costs of the products Step 2: Identify the direct costs of the products. Step 3: Select the activities and cost-allocation bases to use for allocating indirect costs to the products for allocating indirect costs to the products.
Detailed explanation-2: -To calculate the per unit overhead costs under ABC, the costs assigned to each product are divided by the number of units produced.
Detailed explanation-3: -The four steps in ABC are identifying activities, estimating their amount and allocation base, computing predetermined rate, and allocating overhead costs.
There is 1 question to complete.