Consider the following statements about the two-stage cost allocation process.
i. Costs in various cost pools are distributed to all departments, including support and production departments.
ii. Support department costs are allocated to production departments.
iii. Costs are assigned to each production department that has worked on the product.
Which statement/s is/are correct?

A) i, ii and iii
B) i and iii
C) iii
D) ii

Two-Stage Cost Allocation

A method in cost accounting where costs are first allocated to intermediate cost pools and then charged to specific products or services.

Support Department Costs

Expenses incurred by departments that do not directly produce goods or services but provide necessary support to production departments, such as human resources or maintenance.

Production Departments

Specific areas or units within a manufacturing facility where different stages of the production process are carried out.