Quiz Chapter 5
1. The unique
feature of an ABC system is the emphasis on:
A. costing individual jobs.
B. department indirect-cost pools.
C. multiple cost pools.
D. individual activities.
2. Do ABC systems always provide more accurate product costs than conventional cost systems?
Why or why not?
If products are identical, the traditional cost system would do at least as good of a
job and sometimes better.
3. Mayan Potters manufactures two sizes of ceramic paperweights, regular and jumbo. The
following information applies to their expectations for the planning period:
15,000 maintenance hours
Total support costs
= 16,000,000 units
Mayan Potters uses an ABC system and assigns overhead costs based on the overhead activity
information provided above.
During October, Mayan produced 700,000 regular ceramic paperweights and Mayan’s
production manager counted 2,000 orders; 1,000 maintenance-hours; 2,000 setups; and 2,000
inspections for the regular product line. For October, Mayan’s controller assigned _________
indirect costs to the regular product line.
D. None of these answers are correct.