KA2e_SelfStudy_Ch17

KA2e_SelfStudy_Ch17 - File ch17 Chapter 17 Activity-Based...

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File: ch17, Chapter 17: Activity-Based Costing Multiple Choice 1. Activity-based costing (ABC): a) can be used only in a process cost system. b) focuses on units of production. c) focuses on activities performed to produce a product. d) uses only a single basis of allocation. Ans: c Response A: Activity-based costing can be used in either a process cost or a job order cost system. Response B: Activity-based costing focuses on activities performed to produce a product, not on units of production. Response C: Correct! This is an accurate statement about activity-based costing. Response D: Activity-based costing uses multiple bases of allocation, not just a single basis of allocation. 2. 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-stage overhead cost allocation system that identifies activity cost pools and cost drivers. d) uses direct labor as its primary cost driver. Ans: c Response A: Activity-based costing is not necessarily related to the conversion to a just- in-time operating environment. Response B: Activity-based costing can be used in either a process cost or a job order cost system. Response C: Correct! This is an accurate description of activity-based costing. Response D: Other activities besides direct labor are used as cost drivers in activity-based costing. 3. Any activity that causes resources to be consumed is called a: a) just-in-time activity. b) facility-level activity.
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c) cost driver d) non-value-added activity. Ans: c Response A: Activities that cause resources to be consumed are called cost drivers, not just-in-time activities. Response B: Activities that cause resources to be consumed are called cost drivers, not facility-level activities. Response C: Correct! Activities that cause resources to be consumed are called cost drivers. Response D: Activities that cause resources to be consumed are called cost drivers, not
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This note was uploaded on 04/22/2009 for the course BCOR 2000 taught by Professor Brush during the Spring '07 term at Colorado.

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KA2e_SelfStudy_Ch17 - File ch17 Chapter 17 Activity-Based...

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