The two stages of allocation process in activity based costing?

In activity-based costing (ABC), the allocation process consists of two main stages: resource allocation and activity allocation. In the first stage, costs are assigned to specific activities based on resource consumption, determining how much each activity costs. In the second stage, these activity costs are then allocated to products or services based on their usage of the activities, allowing for a more accurate reflection of costs associated with each product or service. This method enhances decision-making by providing detailed insights into cost drivers and profitability.