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61) Four basic steps used in an ABC system. List

Question : 61) Four basic steps used in an ABC system. List : 1876946

61) Four basic steps are used in an ABC system. List the proper order of these steps, which are currently scrambled below:

a.Identify the primary activities and estimate a total cost pool for each.

b.Allocate the costs to the cost object using the activity cost allocation rates.

c.Select an allocation base for each activity.

d.Calculate an activity cost allocation rate for each activity.

A) c, a, b, d

B) a, c, d, b

C) b, a, c, d

D) a, d, c, b

62) The use of which of the following costing systems is most likely to reduce cost distortion to a minimum?

A) Plantwide overhead rate

B) Departmental overhead allocation rates

C) Traditional costing system

D) Activity-based costing

63) Which of the following does ABC take into account?

A) The types of manufacturing activities used by the product

B) The extent to which the manufacturing activities are used by the product

C) Both A and B

D) Neither A nor B

64) Machine set-up would most likely be classified as a ________ cost.

A) batch-level

B) unit-level

C) product-level

D) facility-level

65) Research and development would most likely be classified as a ________ cost.

A) unit-level

B) batch-level

C) facility-level

D) product-level

66) Using factory utilities would most likely be classified as a ________ cost.

A) unit-level

B) batch-level

C) facility-level

D) product-level

67) Molding and sanding each unit of product would most likely be classified as a ________ cost.

A) unit-level

B) batch-level

C) product-level

D) facility-level

68) All of the following are considered to be part of the cost hierarchy often used to implement ABC, with the exception of

A) production-level activity.

B) batch-level activity.

C) product-level activity.

D) unit-level activity.

69) In ABC, how is the activity allocation rate computed?

A) The total estimated activity allocation base is divided by the total estimated activity cost pool.

B) The total estimated activity cost pool is divided by the total estimated activity allocation base.

C) The total estimated activity allocation base is multiplied by the total estimated activity cost pool.

D) You take the total estimated activity allocation base and subtract the total estimated total activity cost pool.

70) In developing an ABC system, what is the last step?

A) Identify the primary activities and estimate a total cost pool for each.

B) Select an allocation base for each activity.

C) Allocate the costs to the cost object using the activity cost allocation rates.

D) Calculate an activity cost allocation rate for each activity.

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Accounting 9 Months Ago 17 Views
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