85. The first step in activity-based costing is to A) identify the cost driver that has a strong correlation to the activity cost pool. B) identify and classify the activities involved in the manufacture of specific products, and allocate overhead to cost pools. C) assign overhead costs to products, using overhead rates determined for each cost pool. D) compute the activity-based overhead rate per cost driver. 86. Use of activity-based costing will result in the development of A) one plantwide activity-based overhead rate. B) one overhead rate based on direct labor hours. C) multiple activity-based overhead rates. D) no overhead rates; overhead rates are not used in activity-based costing. 87. Gantner Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (60%) 60,000 Completed and transferred out 180,000 Work in process, May 31 (40%) 50,000 If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May? A) 200,000 B) 224,000. C) 240,000 D) 230,000