Question

The first stage of ABC entails the assignment of

a) resource costs to departments.
b) activity costs to products or customers.
c) resource costs to a plantwide pool.
d) resource costs to distribution channels.
e) resource costs to individual activities.

Answer 1

e) resource costs to individual activities.

Step-by-step explanation:

Under ABC that is activity based costing system, all the indirect costs are allocated based on activities and ratio of activities in different department.

Therefore, correct option is assignment of the resource cost that is basic cost to individual activities.

As with this we calculate the activity cost per unit of activity, this further allocates cost to the portion of activity to each department.