Chapters_5_and_6_Assignment_Solution

Chapters_5_and_6_Assignment_Solution - Chapter 5 and 6...

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Chapter 5 and 6 Assignment Solution Multiple Choice: 1. Which of the following is a key feature of activity-based costing? A. Overhead costs are assigned on the basis of volume. B. Overhead costs are assigned on the basis of sales. C. Overhead costs are assigned on the basis of direct labor hours. D. Overhead costs are assigned on the basis of activities. 2. Which of the following statements is false regarding the identification of activities in ABC? A. The identification of activities that drive overhead costs is done before cost drivers are selected. B. An activity can be thought of as a procedure or process that causes work to be accomplished. C. Each type of overhead cost should be traced to only one activity. D. An activity that drives overhead costs can occur outside the physical manufacturing facility. 3. Troxler Inc. produces various types of floor rugs with many different designs. They typically produce at least 200 rugs with a single machine setup. A cost incurred every time an individual rug is produced is called a: A. product-level cost. B. batch-level cost. C. unit-level cost. D. facility-level cost. 4. Herndon Brothers Inc. produces a variety of all-natural household cleaning supplies that it manufactures and distributes to various grocery stores along the east coast. Which of the following types of costs would most likely be classified as a batch-level cost? A. a package product design cost B. a machine setup cost C. depreciation on the factory building D. utility costs for factory machinery
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5. The wage paid to an assembly-line worker would most likely be classified as: A. overhead. B. a product-level cost. C. direct labor. Remember that ABC is about overhead – not DM and DL . D. a facility-level cost. 6. Which of the following statements is false regarding activities in an ABC system? A. As a business becomes more complex, more activities will probably need to be identified.
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This note was uploaded on 02/17/2012 for the course ACC 200 taught by Professor Buckless during the Spring '08 term at N.C. State.

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Chapters_5_and_6_Assignment_Solution - Chapter 5 and 6...

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