Final answer:
A manager is deciding whether to use activity-based costing or a single cost pool. In Step 3 of the decision-making process,
Step-by-step explanation:
In Step 3 of the decision-making process, a manager may weigh the costs and benefits of using activity-based costing or a single cost pool. They will compare the marginal costs of implementing each costing method against the marginal benefits of using it. By analyzing the costs and benefits, the manager can make an informed decision on which costing method to use.
The manager will examine tangible and intangible factors, consider stakeholders' perspectives, and project the financial impact of implementing activity-based costing versus a single cost pool. Ultimately, this analysis will guide the manager in determining the most cost-effective and efficient accounting method for the firm's specific circumstances.