The Basic Difference Between a First-Stage Cost Allocation and a Second-Stage

question 72

Multiple Choice

The basic difference between a first-stage cost allocation and a second-stage cost allocation is that:

• A) 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.
• C) the first stage prohibits firms from aligning the allocation of costs with the use of resources.
• D) when used in an ABC system, the first stage assigns costs to activities.

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Definitions:

Participants

Individuals who take part in a particular process, study, or event.

Confounded

Confusion or a mix-up, especially in experimental results, caused by unexpected variables affecting the outcome.

Experimenter Bias

A form of bias introduced by the expectations or beliefs of the experimenter affecting the outcomes of an experiment.

Flinch

A quick, involuntary movement or draw back, often from fear or pain.