Final answer:
The first step in activity-based costing is identifying activities, which is crucial in assigning costs accurately to products or services.
Step-by-step explanation:
The first step in applying activity-based costing (ABC) is A. Identifying activities. This involves determining all the tasks that are performed within a company that contribute to the final product or service. After identification, the costs of these activities are then assigned to the products or services based on actual consumption of each activity.