When using an activity-based costing system in service companies,the allocation of indirect costs to the cost object is the last step of the process.

Question

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In an activity-based costing system, the indirect costs are first allocated to cost pools based on the activities that drive those costs. Then the costs pools are allocated to the cost object (such as a product, service, or customer) based on the activity usage. Therefore, the allocation of indirect costs to the cost object is the last step of the process.

When Using an Activity-Based Costing System in Service Companies,the Allocation