An activity-based costing system is developed in four steps
a. Compute the predetermined overhead allocation rate for each activity.
b. Identify activities and estimate their total costs.
c. Identify the cost driver for each activity and then estimate the quantity of each driver's allocation base.
d. Allocate the indirect costs to the cost object.
Which of the following is the correct order for performing these steps?
A) a, b, c, d
B) c, a, b, d
C) b, c, a, d
D) b, a, c, d
C
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Floors R Us, a franchisor, cancels its franchise agreement with Bernardo, the franchisee, without any notice. Floor's action:
a.) will allow Bernardo a right to reimbursement of his franchise fee. b.) is an act in the ordinary course of business. c.) is a violation of federal law. d.) is likely a wrongful termination.
Entering a new market or industry with existing expertise is known as divestiture.
a. true b. false