Multiple Choice Questions
1. When using departmental overhead rates, which of the following cost objects is the first in the cost allocation process?
a. Activities
b. Units of product
c. Product lines
d. Departments
2. Which costing method assumes all products use overhead costs in the same proportions?
a. Activity-based costing
b. Plantwide overhead rate method
c. Departmental overhead rate method
d. All cost allocation methods
3. Which of the following would usually not be used in computing plantwide overhead rates?
a. Direct labor hours
b. Number of quality inspections
c. Direct labor dollars
d. Machine hours
4. With ABC, overhead costs should be traced to which cost object first?
a. Units of product
b. Department
c. Activities
d. Product batches