ECONOMICS

Detailed explanation-1: -Activities consume overhead resources and are considered cost objects. Under the ABC system, an activity can also be considered as any transaction or event that is a cost driver. A cost driver, also known as an activity driver, is used to refer to an allocation base.

Detailed explanation-2: -In the second-stage allocation in activity-based costing, overhead costs are allocated from activity cost pools to products. An activity in activity-based costing is an event that causes the consumption of overhead resources.

Detailed explanation-3: -Activity. An event that causes the consumption of overhead resources. Activity-based costing. A two-stage costing method in which overhead costs are assigned to products on the basis of the activities they require.

Detailed explanation-4: -Any activity that causes resources to be consumed is called a: cost driver. The first step in the development of an activity-based costing system is: identify and classify activities and allocate overhead to cost pools.

Detailed explanation-5: -To calculate the per unit overhead costs under ABC, the costs assigned to each product are divided by the number of units produced.