Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because
A)Costs are assigned first to the activity pools before being assigned to cost objects.
B)Costs are assigned first to the activity pools before being assigned to cost drivers.
C)Costs are assigned first to the activity pools before being assigned to activity drivers.
D)Costs are assigned first to the activity pools before being assigned to activity objects.

Question

Quizplus · Accepted Answer

First-stage allocation refers to the process of assigning manufacturing overhead costs to activity pools before they are assigned to cost objects. This is because activity pools represent the different activities that contribute to the manufacturing overhead costs and need to be identified first before they can be allocated to specific cost objects.

Assigning Manufacturing Overhead Cost to Activity Pools Is Referred to as First-Stage