5. ABC differs from traditional product costing in which of the following ways?a. Overhead is allocated to products in ABCb. Estimated costs are usedc.) Diverse cost drivers are usedd. It is completely accurate0.002

A single, volume-based cost driver, such as direct labour hours or machine hours, is used in…

Answered: 5. ABC differs from traditional product…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following statements about overhead allocation based on volume alone is correct? Select one: a. It will systematically overcost high-volume products and undercost low-volume products. b. It must be used for external financial reporting. c. It will systematically overcost low-volume products and undercost high-volume products. d. It is a key aspect of the activity-based costing model.
! Required information [The following information applies to the questions displayed below.] For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.20 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company's new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: Direct materials Direct labor…
Three
Which of the following statements is true of activity-based costing? O a. ABC ignores the allocation of storage costs. O b. Activities are the cost objects of the second stage of ABC. Ос. An activity cost pool collects costs related to the same activity. O d. ABC is more likely to result in big differences from a traditional costing system if the business makes only one product rather than multiple products.
Which of the following statements is true? O a. Activity-based costs per unit are always greater than volume-based costs per unit. O b. All the statements are false. O c. Different cost allocation methods are constructed so that they typically result in the same or similar estimates of how much it costs to make a product. O d. Activity-based costing typically provides less information about product costs while requiring more recordkeeping. O e. Volume-based costing has typically resulted in overcost for high-volume products and undercost for low-volume products. 11:40 ere to search A D a dx ENG 22-05-2021 hp delete home end an Ed 96 & 7\ 6. + backspace mum lock RO 7 V home g up K enter 50 pause B t shift 2Y end alt ctrl ins
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1. With ABC, overhead costs are assigned to each product based on ________. Group of answer choices machine hours per product price of the product a predetermined overhead rate for a single cost driver the proportion of that product’s use of the cost driver
Which of the following line items will not be found in the absorption costing income statement? Group of answer choices Variable manufacturing and non-manufacturing costs Contribution margin Gross profit Fixed manufacturing costs
9
Which of the following statements is true? O The first step in activity-based costing is to assign overhead costs to products using cost drivers ABC usually results in less appropriate management decisions Activity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools to products using cost drivers O Traditional costing systems use multiple predetermined overhead rates
Which of the following is considered part of the product costs under absorption costing but not under variable costing? Group of answer choices Direct materials Selling expenses Variable overhead Fixed manufacturing overhead
Question: In cost accounting, what is the primary purpose of calculating the predetermined overhead rate? A) To allocate indirect costs to products based on a predetermined formula.B) To determine the actual overhead costs incurred during a specific production period.C) To calculate variable costs associated with each unit of production.D) To assess fixed costs that remain constant regardless of production levels.

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5. ABC differs from traditional product costing in which of the following ways? a. Overhead is allocated to products in ABC b. Estimated costs are used Diverse cost drivers are used a. It is completely accurate 000,032