Which of the following statements is (are)false regarding first-stage and second-stage cost allocation methods? (A)The basic difference between a first-stage cost allocation and a second-stage cost allocation is that cost pools are not used in first-stage cost allocations.(B)Predetermined overhead rates are used in first-stage cost allocations but not in second-stage cost allocations.
A)Only A is false.
B)Only B is false.
C)Neither A and B nor false.
D)Both A and B are false.

Question

Quizplus · Accepted Answer

Both statements A and B are false. The basic difference between first-stage and second-stage cost allocation is not the absence of cost pools in first-stage allocation. Rather, the difference lies in the level of detail and sophistication of allocation. Predetermined overhead rates are used in both first and second-stage cost allocations.

Which of the Following Statements Is (Are)false Regarding First-Stage and Second-Stage