Activity$-$based costing $(ABC)$ is a costing technique that uses a two$-$stage allocation process. Which of the following statements best describes these two stages?

Multiple Choice

The costs are assigned to activities, and then to the products based on each product's use of the activities.

The costs are assigned to departments, and then to the products based upon their use of activity resources.

Direct costs are allocated to the production departments based on a predetermined overhead rate.

Indirect costs are assigned to activities, and then to the products based upon the direct cost resources used by the activities.

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