When using ABC to allocate overhead, there are only two commonly used methods: the direct method and the sequential method.

Question

Quizplus · Accepted Answer

Activity-Based Costing (ABC) primarily uses cost drivers to allocate overhead costs, not limited to just the direct or sequential methods. These methods are more commonly associated with the allocation of service department costs to producing departments, not specifically with ABC overhead allocation.

When Using ABC to Allocate Overhead, There Are Only Two