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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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The first stage of ABC entails the assignment of

  1. a. resource costs to departments.
  2. b. activity costs to products or customers.
  3. c. resource costs to a plantwide pool.
  4. d. resource costs to distribution channels.
  5. e. resource costs to individual activities.

To determine

Identify the correct option that is related to the first stage of ABC.

Explanation

Activity-Based Costing:

Activity based costing is an apportionment of costs that first considers the activity drivers that helps in the allocation of costs to various activities and then allocates costs to different cost objects by using the drivers.

e.

The first step of assignment of cost in ABC is to assign the resource costs to the individual activities. Therefore, this option is correct.

a.

Assigning the resource cost to the departments is the third step of assigning the cost in ABC...

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