1. Identify the true statement regarding product costing methods: a. Traditional methods use several indirect cost rates to allocate costs to products b. Activity based costing uses a single indirect cost rate to allocate costs to products. c. Activity based costing uses several indirect cost rates to allocate costs to products. d. all of the above statements are true. 2. ABC systems create : a. one large cost pool. b. homogenous activity-related cost pools. c. activity-cost pools with a broad focus. d. activity-cost pools containing many direct costs. 3. Budgeting is the common accounting tool companies use for planning and controlling. Budgets : a. are prepared only on an annual basis. b. are prepared independent of the company's long term strategies. c. do not usually reflect actual results, so they are a useless exercise. d. serve as the financial expression of management's plans for the upcoming period. 4. Which of the following is NOT a major benefit of budgets? a. Compels planning b. Eliminates innovation c. Provides performance criteria d. Promotes coordination and communication