Answer:
The ABC steps in order is Option C, D, A, B
1. C) Identify the products that are the cost objects.
2. D) Select the cost allocation bases.
3. A) Compute the allocation rates.
4. B) Compute the total cost of the products
Explanation:
ABC Costing is a supplemental method of cost accounting that provides the decision-making information absent from traditional costing methods. While ABC costing is not limited by business unit boundaries, it can not fully supplant traditional costing methods as it often fails to meet financial reporting requirements for businesses.
ABC Costing focuses on costs contributing to production of a product. It does not attribute other general costs that do not have at least an indirect relationship to the product. While traditional costing systems focus on direct costs and burden a product with other fixed costs, activity based costing increases accuracy of indirect cost assignment.
