Cost Accounting
Multiple Choice Questions
16. 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. A) low, little B) low, considerable C) high, little D) high, considerable
17. Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?
| |Security |Assembly |
|A) |Product |Unit |
|B) |Batch |Batch |
|C) |Organization |Unit |
|D) |Organization |Product |
18. Which of the following would be an acceptable measure of activity for a material handling activity cost pool?
| |Number of |Weight of |
| |material moves |material moved |
|A) |Yes |Yes |
|B) |No |Yes |
|C) |Yes |No |
|D) |No |No |
19. An activity-based costing system that is designed for internal decision-making generally will not conform to generally accepted accounting principles. Which of the following is NOT a reason for this happening? A) Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products. B) Some nonmanufacturing costs are assigned to products. C) Allocation bases other than direct labor-hours, direct labor cost, and machine-hours are used. D) First-stage allocations may be based on
16. 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. A) low, little B) low, considerable C) high, little D) high, considerable
17. Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level, batch-level, product-level, or organization-sustaining?
| |Security |Assembly |
|A) |Product |Unit |
|B) |Batch |Batch |
|C) |Organization |Unit |
|D) |Organization |Product |
18. Which of the following would be an acceptable measure of activity for a material handling activity cost pool?
| |Number of |Weight of |
| |material moves |material moved |
|A) |Yes |Yes |
|B) |No |Yes |
|C) |Yes |No |
|D) |No |No |
19. An activity-based costing system that is designed for internal decision-making generally will not conform to generally accepted accounting principles. Which of the following is NOT a reason for this happening? A) Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining costs) will not be assigned to products. B) Some nonmanufacturing costs are assigned to products. C) Allocation bases other than direct labor-hours, direct labor cost, and machine-hours are used. D) First-stage allocations may be based on