Cost allocation and activity-based costing

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Read the attached case about Cold Stone Creamery. Then think about all of the different products produced by Cold Stone Creamery, the different steps to complete the final products, and the different departments involved. Respond to the following questions.

  • What are activities? Define and give some examples for Cold Stone Creamery.
  • What are some possible activity bases Cold Stone Creamery could use to allocate each cost?
  • What are the benefits for a company, like Cold Stone Creamery, that products many different products to use activity based costing?

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