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 businessmakes only one product rather than multiple products.

Activity based costing represents the costing method where the company identifies the cost pools and…

Which of the following statements is true of activity-based costing? O a. ABC ignores the allocation of storage costs. Ob. Activities are the cost objects of the second stage of ABC. O c. 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 of activity-based costing? O a. ABC ignores the allocation of storage costs. Ob. Activities are the cost objects of the second stage of ABC. O c. 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.

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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1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
Which of the following statements is false? Cost allocations such as activity-based costing allow manager to evaluate profitability of their products. A budget is a quantitative plan for acquiring and using financial and other resources over a specific forthcoming time period. A detailed activity-based costing system is costly to implement. Using different allocation base does not affect manufacturing overhead costs allocated to each product.
Using ABC product cost information when considering reducing cost, which of the following would not be a way to reduce activity costs? a.Improve operations so that the activity-base usage per unit is eliminated. b.Switch to a plantwide allocation rate. c.Improve operations so that the activity-base usage per unit is reduced. d.Change the classification of employees doing an activity to decrease the activity rate.
3.Activity based costing (ABC) is a method of allocating the indirect costs of sales commissions to products. A. true b. false
Which of the following statements is not a characteristic of a target costing system? It is a good system to compare the cost of your products with that of your competitors Assists with ensuring that a business can achieve its desired profit levels Focuses on cost reductions after the product has been designed Focuses on the manufacturing processes to see if improvements can be made from a cost perspective.
Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity? O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume- based system. O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABC system. O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-based system. O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-based system will not. e to search W 11:35 A D A dx ENG 22-05-2021 hp 141 brt se delete home end 96 - backspace num ask lock T 7V 8A 94 home Dg up K enter 5 0 pause ↑ shift 11 end alt ctrl SUt
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.
A cost that would be included in product costs under both absorption costing and variable costing is: supervisory salaries. variable selling expenses. factory rent. variable manufacturing costs.
Which of the following statements regarding activity-based costing (ABC) is NOT correct? a. Under ABC cost centres are replaced by cost pools b. Blanket overhead recovery rates (OAR) are replaced with cost driver rates c. ABC uses one common overhead recovery rate, such as labour hours. d. ABC tackles the problems of absorption costing by adopting a much more accurate way of charging overhead to cost units.
Disadvantages of activity-based costing include which of the following? a. It is not acceptable under GAAP for external reporting. b. It can be costly to implement. c. It can be used in activity-based management. d. Both a. and b.
Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it 4. Which of the following statements is true? An activity measure in activity-based costing expresses how much of an activity is carried out and it is used as the allocation base for assigning overhead costs to products and services. Activity-based management involves focusing on activities to eliminate waste, decrease processing time, and reduce defects. An activity-based costing system is generally more difficult to set up and run than a traditional cost system. Multiple Choice Statements I and II are true. Statements II and III are true. All of the statements are true. None of the statements are true.