Multiple choice

1. Improvements in the production process are examples of _____cost. 

a. prevention 

b. appraisal 

c. internal failure 

d. external failure 

2. Identify which of the following statements is a benefit of decentralization. 

a. Top level managers have the best information concerning local conditions. 

b. Managers acquire decision making ability and other management skills that help them move upward in the organization, assuring continuity of leadership. 

c. Managers make decisions that enhance their segment’s performance. 

d. Managers save time dealing with managers from other segments regarding transfer prices. 

3. Reciprocal services are services provided by a service department to _____. 

a. a producing department 

b. another service department 

c. external customers 

d. all of these answers are correct. 

4.Costs are accumulated in traditional and ABC systems by _____. 

a. activities and organizational units, respectively 

b. organizational units and activities, respectively 

c. activities and activities, respectively 

d. organizational units and organizational units, respectively