6. The cost unit overhead absorption rate can only be used if the business has one standard cost unit. A. True B. False 7. The following statements have been made about ABC and cost drivers. (1) A cost driver is any factor that causes a change in the cost of an activity (2) For long-term variable overhead costs, the cost driver could be the volume of activity (3) Traditional absorption costing tends to under-allocate overhead costs to low- volume products. Which of the above statement is/are true? A. (1) and (3) only B. (2) and (3) only C. (1) and (2) only D. (1), (2) and (3) 8. A company uses activity-based costing to calculate the unit cost of its products. The figures for Period 3 are as follows: Production set-up costs: £84,000. Total production is 40,000 units of each of products A and B, and each run is 2,000 units of A or 5,000 units of B. What is the set-up cost per unit of B? A. £0.10 B. £0.08 C. £0.60 D. £0.29
6. The cost unit overhead absorption rate can only be used if the business has one standard cost unit. A. True B. False 7. The following statements have been made about ABC and cost drivers. (1) A cost driver is any factor that causes a change in the cost of an activity (2) For long-term variable overhead costs, the cost driver could be the volume of activity (3) Traditional absorption costing tends to under-allocate overhead costs to low- volume products. Which of the above statement is/are true? A. (1) and (3) only B. (2) and (3) only C. (1) and (2) only D. (1), (2) and (3) 8. A company uses activity-based costing to calculate the unit cost of its products. The figures for Period 3 are as follows: Production set-up costs: £84,000. Total production is 40,000 units of each of products A and B, and each run is 2,000 units of A or 5,000 units of B. What is the set-up cost per unit of B? A. £0.10 B. £0.08 C. £0.60 D. £0.29
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer all
![6. The cost unit overhead absorption rate can only be used if the business has one
standard cost unit.
A. True
B. False
7. The following statements have been made about ABC and cost drivers.
(1) A cost driver is any factor that causes a change in the cost of an activity
(2) For long-term variable overhead costs, the cost driver could be the volume of
activity
(3) Traditional absorption costing tends to under-allocate overhead costs to low-
volume products.
Which of the above statement is/are true?
A. (1) and (3) only
B. (2) and (3) only
C. (1) and (2) only
D. (1), (2) and (3)
8. A company uses activity-based costing to calculate the unit cost of its products.
The figures for Period 3 are as follows:
Production set-up costs: £84,000.
Total production is 40,000 units of each of products A and B, and each run is 2,000
units of A or 5,000 units of B.
What is the set-up cost per unit of B?
A. £0.10
B. £0.08
C. £0.60
D. £0.29](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6bbd78e4-7c8b-48c2-af98-2b069286f0ae%2F2e451b59-d723-42ad-b5c6-b1819abc157d%2F1u3oz2r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6. The cost unit overhead absorption rate can only be used if the business has one
standard cost unit.
A. True
B. False
7. The following statements have been made about ABC and cost drivers.
(1) A cost driver is any factor that causes a change in the cost of an activity
(2) For long-term variable overhead costs, the cost driver could be the volume of
activity
(3) Traditional absorption costing tends to under-allocate overhead costs to low-
volume products.
Which of the above statement is/are true?
A. (1) and (3) only
B. (2) and (3) only
C. (1) and (2) only
D. (1), (2) and (3)
8. A company uses activity-based costing to calculate the unit cost of its products.
The figures for Period 3 are as follows:
Production set-up costs: £84,000.
Total production is 40,000 units of each of products A and B, and each run is 2,000
units of A or 5,000 units of B.
What is the set-up cost per unit of B?
A. £0.10
B. £0.08
C. £0.60
D. £0.29
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