1. With ABC, overhead costs should be traced to which cost object first?
a. Units of product
b. Activities
c. Departments
d. Product lines
2. When using departmental overhead rates, which of the following cost objects is the first in the cost assignment process?
a. Activities
b. Units of product
c. Departments
d. Product lines
3. Which costing method tends to overstate the cost of high-volume products?
a. Traditional volume-based costing
b. Activity-based costing
c. Job order costing
d. Differential costing
4. If management wants the most accurate product cost, which of the following costing methods should be used?
a. Volume-based costing using departmental overhead rates
b. Volume-based costing using a plantwide overhead rate
c. Normal costing using a plantwide overhead rate
d. Activity-based costing