Module 4 quiz

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Question 1 (Mandatory) (3 points) Activity-Based Costing is best explained by which of the following statements? A) Ordering all costs alphabetically for easier cataloging in a database. B) Accumulating and allocating overhead costs based on a variety of activity drivers. C) Calculating costs sequentially by the order that they affect the production process. D) More accurately tracking materials and labor costs for each product. Question 2 (Mandatory) (3 points) Using a company-wide overhead rate rather than Activity-Based Costing might lead to which of the following problems? A) Overpricing products B) Under-pricing products C) Discontinuing profitable operations D) Continuing unprofitable operations E) All of the above Question 3 (Mandatory) (3 points) Which of following statements are true regarding early 20th-century manufacturing companies? A) Production processes were simpler than now. B) Most companies produced only a limited variation of products in one facility. C) Materials and wages constituted the largest portions of the per-unit costs. D) Production was labor intensive. E) All of the above. Question 4 (Mandatory) (2 points) Which of the following activities would incur costs that could be tracked and allocated using Activity-Based Costing? A) Machine set-ups

B) Customer billing process C) Payroll preparation D) Equipment maintenance and routine cleaning E) All of the above Question 5 (Mandatory) (2 points) Which of the following are viable options for dealing with an unprofitable customer? A) Drop the customer B) Continue to serve the customer C) Work more closely with the customer D) Renegotiate the contract terms with the customer E) All of the above Question 6 (Mandatory) (2 points) Which of the following departments can benefit from Activity-Based Costing analysis? A) Human Resources B) Finance and Accounting C) Production D) Marketing E) All of the above Question 7 (Mandatory) (2 points) Which of the following functions would not be considered an appropriate cost pool for an Activity-Based Costing analysis? A) Payroll Processing B) Accounts Receivable C) Equipment Maintenance D) Product Development E) All of the above are appropriate cost pools

Question 8 (Mandatory) (2 points) Which of the following problems of traditional costing approaches are typically revealed by switching to Activity-Based Costing? A) Over-costing of low-volume, high-complexity products B) Under-costing of high-volume, low-complexity products C) Over-producing unprofitable products D) Under-producing profitable products E) C and D only Question 9 (Mandatory) (0/2 points) Which of the following statements are false regarding Activity-Based Costing? A) Non-manufacturing costs are important to include when calculating the cost of each product. B) Costs are allocated based on a pre-determined overhead rate. C) Transitioning from traditional costing methods to Activity-Based Costing can be complicated and costly. D) Activity-Based Costing follows the same basic calculation methods as traditional costing approaches. E) None of the above Question 10 (Mandatory) (2 points) Which of the following statements are true regarding Activity-Based Costing? A) Non-manufacturing costs are not important to include when calculating the cost of each product. B) Costs are allocated based on a pre-determined overhead rate for each cost pool. C) Transitioning from traditional costing methods to Activity-Based Costing is a relatively simple process that most companies complete quickly. D) Activity-Based Costing results in a different amount of total overhead applied than under traditional costing methods. E) None of the above Question 11 (Mandatory) (2 points)

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Which of the following statements are true regarding current manufacturing companies? A) Production processes were simpler than before. B) Most companies produced only a limited variation of products in one facility. C) Materials and wages constituted the largest portions of the per-unit costs. D) Production is labor intensive. E) None of the above. Question 12 (Mandatory) (2 points ) Which of the following statements is not true regarding current manufacturing companies? A) Production processes are highly automated. B) Materials and wages constitute the largest portions of the per-unit costs. C) Production processes are more complex. D) Companies produce a wide variety of products in individual facilities. E) Most production labor time is spent running production equipment rather than actually physically working on a product. Question 13 (Mandatory) (2 points) Which of the following statements is true regarding current manufacturing companies? A) Most production labor time is spent running production equipment rather than actually physically working on a product. B) Production processes are highly automated and more complex. C) Companies produce a wide variety of products in individual facilities. D) Manufacturing Overhead constitutes a significant portion of per-unit costs. E) All of the above Question 14 (Mandatory) (2 points) Which of the following statements most accurately describes Activity-Based Costing?

A) Costs are accumulated in departments and allocated based on a single driver for each department. B) Costs are accumulated in departments and allocated based a variety of drivers for each department. C) Costs are accumulated in cost pools and allocated based on a single driver for each pool. D) Costs are accumulated in cost pools and allocated based on a variety of drivers for each pool. E) None of the above Question 15 (Mandatory) (2 points) Which of the following statements regarding Activity-Based Costing is correct? A) Overhead costs are allocated based on actual costs incurred in a period. B) Direct costs (materials and labor) are accumulated in cost pools and assigned based on driver usage. C) Increases in information technology have made Activity-Based Costing less useful. D) Cost drivers and cost objects are essential parts of Activity-Based Costing. E) All of the above are correct. Question 16 (Mandatory) (2 points) Which of the following steps are part of the Activity-Based Costing model? A) Identify key activities that drive overhead costs B) Assign overhead costs to activity cost pools C) Allocate costs to products or units based on driver usage D) Allocate costs evenly to products or units E) A, B, and C

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