Which statement 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 systems use a two-stage allocation process. In traditional costing, costs are allocated to departments and then to products. In ABC, costs are allocated to activities and then to products.

Which Statement About Costing Systems Is True