Activity-based costing [5-10 min]
Activity-based costing requires four steps.
Requirement
1. Rank the following steps in the order in which they would be completed. Number the first step as “1” until you have ranked all four steps.
a. Compute the cost allocation rate for each activity.
b. Identify the cost driver for each activity and estimate the total quantity of each driver’s allocation base.
c. Allocate indirect costs to the cost object.
d. Identify each activity and estimate its total indirect cost.
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