Show MULTIPLE CHOICE QUESTIONS 1.Consider the following statements regarding traditional costing systems: I.Overhead costs are applied to products on the basis of volume-related measures. II.All manufacturing costs are easily traceable to the goods produced. III.Traditional costing systems tend to distort unit manufacturing costs when numerous goods are made that have widely varying production requirements. Which of the above statements is (are) true? A.I only. B.II only. C.III only. D.I and III. E.II and III. Answer: D LO: 1 Type: N 2.Many traditional costing systems: A.trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates. B.write off manufacturing overhead as an expense of the current period. C.combine widely varying elements of overhead into a single cost pool. D.use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product costing. E.produce results far superior to those achieved with activity-based costing. Answer: C LO: 1 Type: N 3.The following tasks are associated with an activity-based costing system: 1—Calculation of cost application rates 2—Identification of cost drivers 3—Assignment of cost to products 4—Identification of cost pools Which of the following choices correctly expresses the proper order of the preceding tasks? A.1, 2, 3, 4. B.2, 4, 1, 3. C.3, 4, 2, 1. D.4, 2, 1, 3. E.4, 2, 3, 1. Answer: D LO: 2, 4 Type: RC Chapter 5109 The following tasks are associated with an activity-based costing system: 1—Calculation of cost application rates Which of the following choices correctly expresses the proper order of the preceding tasks? 7.Which of the following is leastlikely to be classified as a batch-level activity in an activity-basedcosting system?A.Shipping.B.Receiving and inspection.C.Production setup.D.Property taxes.E.Quality assurance. 8.In an activity-based costing system, materials receiving would typically be classified as a: 9.The salaries of a manufacturing plant's management are said to arise from: 10.Which of the following choices correctly depicts a cost that arises from a batch-level activity andone that arises from a facility-level activity? 11.The division of activities into unit-level, batch-level, product-sustaining level, and facility-levelcategories is commonly known as a cost:Aobject.application method.hierarchy.estimation method.Eclassification scheme that is useful in traditional, volume-based systems.BCD 12.Alamo's customer service department follows up on customer complaints by telephone inquiry.During a recent period, the department initiated 7,000 calls and incurred costs of P203,000.If2,940 of these calls were for the company's wholesale operation (the remainder were for the retaildivision), costs allocated to the retail division should amount to: We have textbook solutions for you!The document you are viewing contains questions related to this textbook. Expert Verified
PICPA-WR CPA REVIEW PROGRAMMANAGEMENT SERVICES8 August 2015MAS-2015-13Benjie PangilinanActivity-Based CostingUse the following to answer questions 13-14:Riverside Florists uses an activity-based costing system to compute the cost of making floral bouquetsand delivering the bouquets to its commercial customers.Company personnel who earn P180,000typically perform both tasks; other firm-wide overhead is expected to total P70,000.These costs areallocated as follows:BouquetProductionDeliveryOtherWages and salaries60%30%10%Other overhead50%35%15%Riverside anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. What are examples of batch level activities?Batch-level activities are costs related to the production of a batch of one product. Batch-level activities can include machine setup, quality testing, maintenance, and purchase orders.
What are the 4 levels of activity?Four Levels of Activity
With activity-based costing, sometimes referred to as ABC, companies account for expenses by categorizing the source of the cost into one of four general groups: unit-based, batch-based, product-based, and facility-based costs.
Which of the following is not a level activity?Inspecting. Inspecting is not a unit-level activity; it is a batch-level activity.
Is machining a batch level activity?This is batch level because machines are setup and prepared for every production run, which is done for a batch of inventory.
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