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Disadvantages of Two-Stage Activity Based Costing

MGRACT-SS74AK

Which of the following statements is/are true about the disadvantages of Two-Stage Activity Based Costing?

Select ALL that apply.

A

Two-stage ABC does not conform to Generally Accepted Accounting Principles, therefore cannot be used for external reporting.

B

Two-stage ABC requires managers and cost accountants to examine every single item in overhead for application at two stages, resulting in a higher cost of accounting and management.

C

Two-stage ABC is more effective when a department creates many different products of varying complexities.

D

Two-stage ABC uses more allocation bases and cost drivers resulting in more accurate costing.