TB.docx - Chapter 5 Activity-Based Costing and Management True False Questions 1 Because labor hours are related closely to the volume of activity in

TB.docx - Chapter 5 Activity-Based Costing and Management...

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Chapter 5 Activity-Based Costing and Management True / False Questions 1. Because labor hours are related closely to the volume of activity in the factory, these traditional product-costing systems often are said to be volume-based costing systems . TRUE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-01 Feedback True: Correct! It is true that traditional product-costing systems where labor hours are related closely to the volume of activity are called volume-based costing systems. Feedback False: This is a true statement. 2. Traditional product-costing systems are structured on multiple, volume- based cost drivers. FALSE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-01 Feedback True: This statement is false. Feedback False: Correct! Traditional product-costing systems are structured on single, volume-based cost drivers, such as direct labor or machine hours.
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3. In the first stage of ABC, a cost driver is selected for each activity cost pool. FALSE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-02 Feedback True: This statement is false. Feedback False: Correct! In the first stage of ABC, resource costs are identified and divided into activity cost pools. 4. When using ABC, overhead costs assigned to each activity comprise an activity cost pool. TRUE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-02 Feedback True: Correct! Overhead costs assigned to each activity in ABC are known as an activity cost pool. Feedback False: This statement is true. 5. In an activity-based costing system, direct materials used would typically be classified as a unit-level cost. TRUE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze
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Difficulty: 1 Easy Learning Objective: 05-03 Feedback True: Correct! It is true that an activity based costing system typically classifies direct materials used as unit-level costs. Feedback False: This is a true statement. 6. Engineering design costs are typically known as batch-level activities. FALSE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-03 Feedback True: This statement is false. Feedback False: Correct! Engineering design costs are typically identified as product-sustaining-level activities. 7. The pool rate is defined as the cost per unit of the cost driver for a particular activity cost pool. TRUE AACSB: Reflective Thinking AICPA: FN Decision Making AICPA FN: Research Blooms: Analyze Difficulty: 1 Easy Learning Objective: 05-04 Feedback True: Correct! It is true that the pool rate is the cost per unit of the cost driver for a particular activity cost pool.
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  • Spring '13
  • AACSB

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