proffessor2013

1.

Activity-based management seeks to eliminate waste by allocating costs to products that waste resources.    True    False

2.

Direct labor-hours or direct labor cost should not be used as a measure of activity in an activity-based costing system.    True    False

3.

In activity-based costing, nonmanufacturing costs are not assigned to products.    True    False

4.

In traditional costing, some manufacturing costs may be excluded from product costs.    True    False

5.

Organization-sustaining overhead costs should be allocated to products just like unit-level and product-level activities.    True    False

6.

Activity-based costing uses a number of activity cost pools, each of which may have a different allocation base.    True    False

7.

In activity-based costing, organization-sustaining costs should be included in product costs for internal management reports that are used for decision-making.    True    False

8.

The practice of assigning the costs of idle capacity to products results in more stable unit product costs.    True    False

9.

In general, duration drivers are more accurate measures of the consumption of resources than transaction drivers.    True    False

10.

Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect only variable costs.    True    False

11.

In traditional costing systems, manufacturing costs that are not caused by products are not assigned to products.    True    False

12.

When a company shifts from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system with batch-level and product-level costs, the unit product costs of low volume products typically decrease whereas the unit product costs of high volume products typically increase.    True    False

13.

The costs of idle capacity should be assigned to products in activity-based costing.    True    False

14.

In activity-based costing, some manufacturing costs can be excluded from product costs.    True    False

 15.

Batch-level activities are performed each time a unit is produced.    True    False

Multiple Choice

16.

An activity-based costing system that is designed for internal decision-making will not conform to generally accepted accounting principles because:   

17.

Assembling a product is an example of a(n):    

18.

If substantial batch-level or product-level costs exist, then overhead allocation based on a measure of volume such as direct labor-hours alone:   

19.

Which terms would make the following sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce.   

20.

Which of the following costs should not be included in product costs for internal management reports that are used for decision-making?   

21.

The plant manager's salary is an example of a(n):    

22.

Setting up a machine to change from producing one product to another is an example of a(n):    

23.

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?   

24.

The labor time required to assemble a product is an example of a(n):    

25.

Which of the following levels of costs should not be allocated to products for decision-making purposes?