Purchase Solution

Activity based costing vs. step down allocation method

Not what you're looking for?

Ask Custom Question

What is the relationship between the concepts cost allocation basis as used in the step-down method and cost driver as used in ABC?

Purchase this Solution

Solution Summary

Your tutorial is 201 words and gives an example to illustrate how the cost allocation basis is the same in both methods.

Solution Preview

The "cost allocation basis" is the activity used to spread costs to a cost object. For instance, you can use labor hours to spread overhead to jobs in a factory. Or you can use headcount to spread department costs to production. Both step-down and activity based costing use cost allocation basis as the way they spread costs to the area that is supposed to absorb the indirect costs. There is no ...

Solution provided by:
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution

Free BrainMass Quizzes
Learning Lean

This quiz will help you understand the basic concepts of Lean.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.


This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Business Processes

This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.