First-stage allocations in an ABC system should not be based on the opinions of employees about how costs should be distributed among activity cost pools.

Question

Quizplus · Accepted Answer

First-stage allocations in an ABC (Activity-Based Costing) system can indeed involve the opinions of employees, especially when direct measures of resource consumption are not available. Employees' insights into how resources are consumed by different activities can be valuable in assigning costs more accurately to activity cost pools.

First-Stage Allocations in an ABC System Should Not Be Based