Determining costs of activity pools requires assigning costs accumulated in various account classifications to each of the activity cost pools.This is referred to as ________.
A)first-stage allocation
B)second-stage allocation
C)third-stage allocation
D)forth stage allocation
E)fifth stage allocation

Question

Quizplus · Accepted Answer

First-stage allocation involves assigning costs from various account classifications (such as direct labor, direct materials, and overhead) to activity cost pools. Second-stage allocation then involves assigning costs from the activity cost pools to specific cost objects (such as products, services, or customers). Third, fourth, and fifth stage allocation do not typically occur in activity-based costing.

Determining Costs of Activity Pools Requires Assigning Costs Accumulated in Various