The First-Stage Allocation in an ABC System Is the Process

question 80

True/False

The first-stage allocation in an ABC system is the process of assigning functionally organized overhead costs derived from the company's general ledger to activity cost pools.

---

Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life.

Manufacturing Overhead-Applied

The allocation of manufacturing overhead costs to individual products or job orders based on a pre-determined overhead rate.

Direct Labor

The wages and other costs for labor directly involved in the production of goods or services.

Annual Overhead

The total recurring business expenses not directly tied to the production of goods or services, calculated on a yearly basis.