Please complete Discussion Questions as follows:

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I. What is the first step in applying activity$-$based costing?

II$.$ If plantwide overhead rates are allowed for reporting costs to external users, why

might a company choose to use a more complicated and more expensive method

for assigning overhead costs to products?

Activity$-$based costing is generally considered more accurate than other methods

of assigning overhead. If this is so$,$ why do all manufacturing companies not use

it$?$

IV$.$ Why are overhead costs allocated to products and not individually traced to

products as direct materials and direct labor are?

V$.$ The usefulness of overhead allocations based on a single plantwide overhead rate

depends on two critical assumptions. What are those assumptions?