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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 second stage of ABC entails the assignment of

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

To determine

Identify second stage of ABC system.

Explanation

Activity Based Costing (ABC):

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.

a.

The second stage in ABC analysis is tracing cost of activities to cost objects such as customers, products, departments and territories. Therefore, a is correct option.

b.

Second stage of ABC analysis involves assigning activity cost to cost object...

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