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Managerial Accounting

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Basics of the ABC Two-Stage Approach

MGRACT-N$F4LR

Which of the following statements is/are true regarding the Activity Based Costing (ABC) two-stage approach to allocate departmental costs ? Select ALL that apply.

A

Two-stage ABC is also called the two-stage allocation approach.

B

Costs are allocated to cost activity cost pools in stage 1.

C

Activity costs stored in activity cost pools are allocated to products or services in stage 2.

D

All production overhead is allocated in the second stage while the first stage is for direct materials and direct labor.