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1. The major limitation of volume-based costing systems is the use of volume-based:
2. Volume-based rates produce inaccurate product cost when:
3. If the usage of project activities is not proportional to the number of units produced, then
some managers will be overcharged and others undercharged under the:
4. Volume-based overhead rates may cause undesirable strategic effects such as:
5. Activity-based costing (ABC) differs from other costing approaches in that it more
accurately measures the cost of activities that are:
6. In performing activity analysis during the design of an activity-based costing (ABC)
system, the management accountant studies:
7. Effective implementation of activity-based costing (ABC) requires:
8. Elimination of low-value-added activities in a firm should:
9. When gathering activity data, which of the following would not be a question that ABC
project team members typically ask employees or managers?
10. Successful activity-based costing (ABC) implementation depends upon the firm:
11. A measure of the quantity of resources consumed by an activity is:
12. A measure of frequency and intensity of demands placed on activities by cost objects is:
13. An activity that is performed for each unit of production is a(n):
14. An activity that is performed to support the production of a new custom-order product is
a:
15. Which one of the following is not a unit-level cost driver?
16. The management of activities to improve the value received by the customer and the
competitiveness of the organization is:
17. The examination of the efficiency of each of a firm's activities is:
18. Which one of the following is a high value-added activity?
19. In regard to selling activities, which one of the following would not be a cost driver for
selling expense?
20. Which one of the following is not a recommendation for a successful implementation of
ABC/M?
21. Which of the following activities is a facility-level activity?
22. A company using a volume-based overhead assignment (allocation) method will tend to:
23. Which of the following is a batch-level cost driver?
24. Which of the following activities is a facility-level activity?
25. In an organization that makes furniture, which of the following is a high value-added
activity?
26. Overhead costs are allocated to cost objects in an activity-based costing system in the
following manner:
27. Which of the following is a batch-level cost driver?
28. Which of the following has the weakest linkage between activity and cost driver?
Activity Cost Driver
A) Machine setup Number of setups
B) Machine maintenance Machine hours
C) Lighting on shop floor Number of kilowatt-hours
D) Quality control Square feet of floor space
E) Materials Handling Weight of materials in process
29. A volume-based rate is an appropriate overhead application base when:
30. Which of the following would likely be the most appropriate cost driver of electric power
used by machines?
31. Using a volume-based overhead rate based on machine hours to assign manufacturing
overhead to a product line that uses relatively few machine hours is likely to:
32. Which of the following is an example of a high-value-added activity?
33. Engineering change orders, maintenance of equipment used in manufacturing, and
product design costs are examples of:
34. In an activity-based costing system, overhead costs are divided into separate:
35. Which of the following would likely be the most appropriate cost driver to allocate
machine set-up costs to products?
36. A firm has many products, some produced in an automated production process and some
produced in a manual production process. Using direct labor hours to assign manufacturing
overhead to a product manufactured with a highly automated process is likely to:
37. Activity-based costing for manufacturing operations is used to assign:
38. The use of activity-based costing is most appropriate for:
39. Which of the following is a benefit of activity-based costing?
