ACTIVITY-BASED COSTING (ABC)
Chapter 8
ACTIVITY-BASED COSTING (ABC)
MULTIPLE CHOICES-THEORETICAL
1.
Traditional costing system are characterized by their use of which of the
following measures as bases for allocating overhead costs to output:
a.
Unit-level drivers.
b.
Batch-level drivers.
c.
Product-level drivers.
d.
Plant-level drivers.
2.
ABC systems are characterized by their use of which of the following
measures as bases for allocating overhead to output:
a.
Unit-level drivers.
b.
Batch-level drivers.
c.
Product-level
drivers. d. All of the
above.
3.
All of the following are distinctions that usually exist between traditional and
ABC costing sytems, except that:
a.
The number of overhead cost pools tends to be lower in ABC systems.
b.
The number of allocation bases tends to be higher in ABC system.
c.
Costs within an ABC cost pool tend to be more homogeneous than the
costs within a traditional system's cost pool.
d.
All ABC systems are two-stage costing systems, while traditional systems may
be one or two stage.
4.
Activity-based costing:
a.
Is the initial phase of converting to a just in time operating environment.
b.
Can be used only in a job order costing system.
c.
Is a two-phase overhead cost allocation system that identifies activity cost pools
and cost
drivers.
d.
Uses direct labor as its primary cost driver.
5.
Examples of activities at the batch level of cost include:
a.
scheduling, setting up, and moving
b.
cutting, painting, and
packaging, designing, changing,
and advertising
d. heating, lighting, and security
6.
Compared to an ABC system, a traditional costing system reports:
a.
A lower unit cost for high volume product and a higher unit cost for low volume
