Home › US CMA Part 1 › Management Accounting › Activity-Based Costing › In the five stages of activity-based costing, ac…
In the five stages of activity-based costing, activity rates are calculated for each:
ATax filing
BBank draft
CCost pool
DCost payer
Answer & Solution
Correct answer: C. Cost pool
1. Stage two gathers costs into pools.
2. Stage three then calculates activity rates for each cost pool.
3. Each pool gets its own rate rather than sharing one plant-wide rate.
4. So the rate is per cost pool.
_Source: OpenStax Principles of Accounting Volume 2, Managerial Accounting (CC BY-NC-SA 4.0), Ch 6 'Activity-Based, Variable, and Absorption Costing', sections 6.1-6.5_
Related questions
Moving to activity-based costing tends to change the per-unit cost of low-volume products One stated disadvantage of activity-based costing is that the method is:When the entire finished goods inventory is sold, net income under the two methods is:Fixed overhead is $12,000 and 10,000 units are made. Under absorption costing each unit caWhy is activity-based costing described as a more accurate way of allocating overhead?Absorption costing applies all direct costs, fixed overhead and variable overhead to the:Under variable costing, fixed overhead costs are treated in which way?Engineering, testing and quality control costs are given as examples of a: