Chapter 3
Q. 3.CR.8
What are the six steps in tracing indirect costs to products?
Step-by-Step
Verified Solution
The six steps are to (1) identify the activities that generate indirect product costs, (2) estimate the cost of the activities, (3) select a cost driver for each activity, (4) estimate the cost-driver use by all products, (5) calculate a cost-driver application rate, and (6) trace activity costs to each product.