Unit level cost drivers are most appropriate as an

33. Unit-level cost drivers are most appropriate as an overhead assignment base when:
a. several complex products are manufactured
b. only one product is manufactured
c. direct labor costs are low
d. factories produce a varied mix of products
34. With traditional costing systems, products manufactured in small batches and in small
annual volumes may be __________ because batch-related and product-sustaining costs
are assigned using unit-related drivers.
THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 35 AND 36:
Products S5 and CP8 each are assigned $50.00 in indirect costs by a traditional costing
system. An activity analysis revealed that although production requirements are identical, S5
requires 45 minutes less setup time than CP8.
35. According to an ABC system, CP8 is __________ under the traditional system.

36. According to an ABC system, S5 uses a disproportionately:
37. Put the following ABC implementation steps in order:
A Compute the allocation rates.
B Compute the total cost of the products.
C Identify the products that are the cost objects.
D Select the cost allocation bases.
a. DACB
b. DBCA
c. BADC
d. CDAB
38. ABC systems identify __________ costs used by products.
39. The focus of ABC systems is on: 40. When designing a costing system, it is easiest to: 41. ABC assumes all costs are __________ because over the long run management can
adjust the amount of resources employed.
a. fixed
b. variable
c. committed
d. nondiscretionary
42. A manufacturing firm produces multiple families of products requiring various
combinations of different types of parts. Of the following, the MOST appropriate cost
driver for assigning materials handling costs to the various products is:

THE FOLLOWING INFORMATION APPLIES TO QUESTIONS 43 THROUGH 46:
Barnes Corporation manufactures two models of office chairs, a standard and a deluxe model.
The following activity and cost information has been compiled:
Number of Number of Number of
Product Setups Components Direct Labor Hours
Standard 22 8 375
Deluxe 28 12 225
Overhead costs $20,000 $40,000