Activity-Based Costing (ABC) Is a Costing Technique That Uses a Two-Stage

question 6

Multiple Choice

Activity-based costing (ABC) is a costing technique that uses a two-stage allocation process. Which of the following statements best describes these two stages?

• A) The costs are assigned to activities, and then to the products based upon their use of the activities.
• B) The costs are assigned to departments, and then to the products based upon their use of activity resources.
• C) Service department costs are allocated to the production departments, and then to the products based upon their use of the activities.
• D) Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.

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Definitions:

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