Question

When using an ABC cost allocation​ system, all of the following steps are performed at the beginning of a​ company's year except​: A. Allocate the costs from each activity using the cost allocation rate. B. Select an allocation base for each​ activity, and estimate the amount used of each allocation base. C. Calculate an activity cost allocation rate for each activity. D. Identify the primary activities and estimate a total overhead cost for each.

Answer 1

C. Calculate an activity cost allocation rate for each activity.

Step-by-step explanation:

The final stage of ABC designing requires applying the cost driver rates to products.Therefore the cost driver must be measurable in a way that it enables it to be identified with individual products. Thus if set up hours are selected as a cost driver there must be mechanism for measuring the set up hours consumed by each product. These cannot be measured at the beginning of the company's year.