Activity-based costing (ABC) is a costing technique that uses a two-stage allocation process. Which of the following statements best describes these two stages?
A) The costs are assigned to activities, and then to the products based upon their use of the activities.
B) The costs are assigned to departments, and then to the products based upon their use of activity resources.
C) Service department costs are allocated to the production departments, and then to the products based upon their use of the activities.
D) Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.

Question

Quizplus · Accepted Answer

In activity-based costing, costs are first assigned to activities, and then products are charged based on their consumption of these activities.

Activity-Based Costing (ABC) Is a Costing Technique That Uses a Two-Stage