Which of the following statements about costing systems is true?
A) Both traditional and activity-based costing systems use a two-stage allocation process
B) Traditional costing systems use a two-stage allocation process, but ABC systems require three stages
C) ABC systems typically use a two-stage allocation process, whereas traditional systems use a single stage
D) Both traditional and activity-based costing systems use a three-stage allocation process

Question

Quizplus · Accepted Answer

Both traditional and activity-based costing (ABC) systems use a two-stage allocation process. In the first stage, overhead costs are collected into cost pools. In the second stage, these costs are allocated to products or services using cost drivers.

Which of the Following Statements About Costing Systems Is True