The basic difference between a first-stage cost allocation and a second-stage cost allocation is that:
A) cost pools are not used in first-stage cost allocations.
B) predetermined overhead rates are used in first-stage cost allocations but not in second-stage cost allocations.
C) the first stage prohibits firms from aligning the allocation of costs with the use of resources.
D) when used in an ABC system, the first stage assigns costs to activities.

Question

Quizplus · Accepted Answer

In an Activity-Based Costing (ABC) system, the first-stage cost allocation assigns costs to activities, which are then used in the second stage to allocate costs to products or services based on their use of these activities.

The Basic Difference Between a First-Stage Cost Allocation and a Second-Stage