Ch04_Guan CM_AISE TB

Ch04_Guan CM_AISE TB - Chapter 4Activity-Based Costing...

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Chapter 4—Activity-Based Costing MULTIPLE CHOICE 1. Which is NOT a characteristic of a functional-based costing system? a. It uses traditional product costing definitions. b. It uses unit-based activity drivers to assign overhead to products. c. It is cheaper than an activity-based costing system. d. It offers greater product costing accuracy than an activity-based costing system. ANS: D PTS: 1 OBJ: 4-1 2. Functional product costing assigns a. direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on unit- level drivers. b. direct materials, direct labor and overhead to departmental cost pools which as assigned to products using predetermined overhead rates based on unit-level drivers. c. direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on non- unit level drivers. d. direct materials, direct labor and overhead to departmental cost pools which are assigned to products using predetermined overhead rates based on non-unit level drivers. ANS: A PTS: 1 OBJ: 4-1 3. Unit-based product costing uses which of the following procedures? a. Overhead costs are traced to departments, then costs are traced to products. b. Overhead costs are traced to activities, then costs are traced to products. c. Overhead costs are traced directly to products. d. All overhead costs are expensed as incurred. ANS: A PTS: 1 OBJ: 4-1 4. A(n) _______________ method first traces costs to a department and then to products. a. direct costing b. absorption costing c. functional-based costing d. indirect costing This may not be resold, copied, or distributed without the prior consent of the publisher.
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ANS: C PTS: 1 OBJ: 4-1 5. A predetermined overhead rate is calculated using which of the following formulas? a. Actual annual overhead / Budgeted annual driver level b. Budgeted annual overhead / Budgeted annual driver level c. Budgeted annual overhead / Actual annual driver level d. none of the above ANS: B PTS: 1 OBJ: 4-1
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6. A costing system that uses actual costs for direct materials and labor and predetermined overhead rates to apply overhead is called a. an actual costing system. b. a normal costing system. c. a standard costing system. d. an activity-based costing system. ANS: B PTS: 1 OBJ: 4-1 7. Common measures of production activity include a. units produced. b. direct labor hours. c. machine hours. d. all of the above. ANS: D PTS: 1 OBJ: 4-1 8. If functional-based product costing is used, which of the following would be traced directly to the product? a. setup costs b. direct labor c. maintenance of machinery d. inspection costs ANS: B PTS: 1 OBJ: 4-1 9. Product costs can be distorted if a unit-based activity driver is used and a. non-unit-based overhead costs are a significant proportion of total overhead. b.
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This note was uploaded on 04/10/2011 for the course ACCT 320 taught by Professor Contas during the Spring '11 term at CSU Long Beach.

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Ch04_Guan CM_AISE TB - Chapter 4Activity-Based Costing...

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