Which of the following statements is true? * A. The traditional approach to costing uses many different cost drivers. B. Costs that are indirect to products are by definition traceable to directly to products. C. Costs that are indirect to products are traceable to some activity. D. All of the above statements are true

Which of the following statements is true? * A. The traditional approach to costing uses many different cost drivers. B. Costs that are indirect to products are by definition traceable to directly to products. C. Costs that are indirect to products are traceable to some activity. D. All of the above statements are true

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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ABC costing attempts to: O A. classify as many costs as indirect costs as is feasible. OB. identify the activities involved in a process. create as many cost pools as possible. O C. O D. seek a lesser level of detail.
'Direct costs are treated differently under the ABC method than under the traditional full costing method.' Is the above statement true or false? A. True B. False
Differential costs are synonymous with: Select one: a. variable costs b. relevant costs c. irrelevant costs d. sunk costs
In activity-based costing, some manufacturing costs may be excluded from product costsTRUEFALSE
Which type of income statements, Contribution Format or Traditional Format should be used to identify relevant costs? Please provide explanation for your answer. Then provide an example including two income statements based on absorption and variable costing, respectively, to support your explanation.
:Under activity-based costing, the process of assigning costs to cost objects is called First stage allocation .a O Calculation of cost object margin .b O None of the given answers .c O Third stage allocation .d O Second stage allocation .e O
Which of the following is NOT correct about the classifications of costs? Select one: a. On the basis of time of computation, costs are classified into historical costs and pre-determined costs. b. Costs are classified as product costs or period costs according to their behaviour with respect to physical capacity usage of the company. c. Costs are classified into direct costs and indirect costs on the basis of their identifiability with cost units or jobs or processes or cost centres. d. Costs behave differently when level of production rises or falls, and based on this, the costs are classified as fixed, variable, or mixed costs.
Dual allocation is a cost allocation approach that separates direct and indirect costs, tracing the direct costs directly to the cost object that: Multiple Choice Relates best to the cost. Is first identified with the cost. Is most impacted by the cost. Can bear the cost. Caused the cost.
A cost objective is: Select one: O A. Confined to direct costs O B. The purpose for which costs are accumulated O C. Relevant only to the manufacturing situation O D. All of the above
3.Activity based costing (ABC) is a method of allocating the indirect costs of sales commissions to products. A. true b. false
What is the difference between variable costing and absorption costing income statements? a. Provide a hypothetical income statement in both formats in which the number of units sold is different from the number of units manufactured. b. Explain the contrast between the two formats.
Which of the following statements is FALSE? a. There is a cause-and-effect relationship between the cost driver and the amount of cost. b. Over the long run all costs have cost drivers. c. Volume of production is a cost driver of direct manufacturing costs. d. Fixed costs have cost drivers over the short run.