Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
1. Unit-level activities are performed each time a unit is produced.
2. Organization-sustaining activities are activities of the general organization that support
specific products.
3. Costs classified as batch-level costs should depend on the number of batches processed
rather than on the number of units produced, the number of units sold, or other measures of
volume.
4. Customer-level activities relate to specific customers and are not tied to any specific
products.
5. Managing and sustaining product diversity requires many more overhead resources such
as production schedulers and product design engineers than managing and sustaining a single
product. The costs of these resources can be accurately allocated to products on the basis of
direct labor-hours.
6. Activity-based costing is a costing method that is designed to provide managers with
product cost information for external financial reports.
7. Transaction drivers usually take more effort to record than duration drivers.
8. In general, duration drivers are more accurate measures of the consumption of resources
than transaction drivers.
9. Even departmental overhead rates will not correctly assign overhead costs in situations
where a company has a range of products that differ in volume, lot size, or complexity of
production.
10. In activity-based costing, some manufacturing costs may be excluded from product costs.
11. In activity-based costing, there are a number of activity cost pools, each of which is
allocated to products and other costing objects using its own unique measure of activity.
12. The practice of assigning the costs of idle capacity to products can result in unstable unit
product costs.
13. An activity-based costing system should include all of the activities carried out in an
organization because any simplification will inevitably result in inaccuracy.
14. The costs of a particular department should not be split up among activity cost pools in an
activity-based costing system.
15. Personnel administration is an example of a:
16. Which of the following activities would be classified as a batch-level activity?
17. Would the following activities at a manufacturer of canned soup be best classified as
unit-level, batch-level, product-level, or organization-sustaining activities?
18. A duration driver is:
19. A transaction driver is:
20. Which of the following is not a limitation of activity-based costing?
21. An activity-based costing system that is designed for internal decision-making will not
conform to generally accepted accounting principles because:
22. Designing a new product is an example of a:
23. Property taxes are an example of a cost that would be considered to be:
24. Mccaskey Corporation uses an activity-based costing system with the following three
activity cost pools:
The Other activity cost pool is used to accumulate costs of idle capacity and organization-
sustaining costs.
The company has provided the following data concerning its costs:
The distribution of resource consumption across activity cost pools is given below:
The activity rate for the Fabrication activity cost pool is closest to:
6-13
25. Christiansen Corporation uses an activity-based costing system with the following three
activity cost pools:
The Other activity cost pool is used to accumulate costs of idle capacity and organization-
sustaining costs.
The company has provided the following data concerning its costs:
The distribution of resource consumption across activity cost pools is given below:
The activity rate for the Order Processing activity cost pool is closest to:
26. Zee Corporation has provided the following data concerning its overhead costs for the
coming year:
The company has an activity-based costing system with the following three activity cost pools
and estimated activity for the coming year:
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of
idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:
The activity rate for the Assembly activity cost pool is closest to:
27. Tadlock Corporation has provided the following data concerning its overhead costs for
the coming year:
The company has an activity-based costing system with the following three activity cost pools
and estimated activity for the coming year:
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of
idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:
The activity rate for the Order Processing activity cost pool is closest to:
28. Bossie Corporation uses an activity-based costing system with three activity cost pools.
The company has provided the following data concerning its costs and its activity based costing
system:
How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity
cost pool?
29. Mckenrick Corporation uses an activity-based costing system with three activity cost
pools. The company has provided the following data concerning its costs and its activity based
costing system:
How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity
cost pool?
