What are the steps in setting up a cost-per-activity system?

Thanks for the invitationagree with mr . soliman

1. Identify the main activities in the organization eg materials handling 

2. Identify the factors which determine the costs of an activity (cost driver)

3. Collect the cost of each activity (cost pools)

4.charge support overheads to products on the basis of their usage of the activity.

Activity_based costing is more refined approach to costing product than traditional costing method. _It involves: *Classification of each activity accounting to the cost hierarchy *Identification and accumulation of total cost s of reach activity *Identification of activities involved in the production process *Calculation of of total units of the cost driver for each activity *Calculation of the activity rate *Application of the cost of each activity to products based on activity usage by the product