Stage 2 allocation

A stage 2 allocation involves distributing the costs of activities to cost objects. The costs of activities are calculated in the first stage of allocations. Examples of cost objects are products, product lines, customers, and sales regions. The stage 2 allocation concept is used in activity-based costing, and is designed to improve the accuracy of overhead allocations.

Related Courses

Activity-Based Costing
Cost Accounting Fundamentals