71) All of the following describe an ABC system except A)

Question : 71) All of the following describe an ABC system except A) : 1876947

71) All of the following describe an ABC system except

A) ABC systems may only be used by service companies.

B) ABC systems can create more accurate product costs.

C) ABC systems are more complex and costly than traditional costing systems.

D) ABC systems are used in both manufacturing and nonmanufacturing companies.

72) Which of the following can be used in conjunction with activity-based costing?

A) Job costing

B) Process costing

C) Both A and B

D) Neither A nor B

73) Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities as building blocks for compiling the indirect costs of products and other cost objects?

A) Job costing

B) Activity-based costing

C) Process costing

D) Product costing

74) Using traditional costing instead of ABC costing might lead to all of the following except

A) cutting back on high-volume products that appear unprofitable.

B) expanding low-volume products that appear profitable.

C) raising the selling price of low-volume products.

D) raising the selling price of high-volume products.

75) Which of the following is not likely to be a cost driver of activities associated with determining product cost?

A) Number of material requisitions

B) Number of cost accountant's labor hours

C) Number of product inspections

D) Number of production orders

76) Which of the following is most likely to be the cost driver for the packaging and shipping activity?

A) Number of setups

B) Number of orders shipped

C) Number of units produced

D) Hours of testing

77) Which of the following is not an activity in an ABC system that determines the cost of a manufactured product?

A) Machining

B) Inspecting

C) Accounting

D) Materials handling

78) Regarding activity-based costing systems, which of the following statements is true?

A) ABC systems accumulate overhead costs by departments.

B) ABC costing systems are less complex and, therefore, less costly than traditional systems.

C) ABC costing systems have separate indirect cost allocation rates for each activity.

D) ABC costing systems can be used in manufacturing firms only.

79) Which of the following does activity-based costing consider to be the fundamental cost object?

A) Direct labor hours

B) Activities

C) Direct materials

D) Finished goods

80) Kramer Company manufactures coffee tables and uses an activity-based costing system. Each coffee table consists of 20 separate parts totaling $240 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows:

ActivityAllocation BaseCost Allocation Rate

Materials handlingNumber of parts$2.00 per part

MachiningMachine hours$2.75 per machine hour

AssemblingNumber of parts$1.00 per part

PackagingNumber of finished units$3.00 per finished unit

What is the cost of materials handling per coffee table?

A) $40.00

B) $20.00

C) $7.75

D) $15.00

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Accounting 9 Months Ago 16 Views
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