• 71:In what fundamental ways does activity-based costing differ from traditional costing methods such as job-order costing as described in Chapters 2 and 3?

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• 72:Why is direct labor a poor base for allocating overhead in many companies?

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• 73:Why are top management support and cross-functional involvement crucial when attempting to implement an activity-based costing system?

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• 74:What are unit-level, batch-level, product-level, customer-level, and organization-sustaining activities?

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• 75:What types of costs should not be assigned to products in an activity-based costing system?

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• 76:What are the two stages of allocation in activity-based costing?

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• 77:Why is the first stage of the allocation process in activity-based costing often based on interviews?

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• 78:When activity-based costing is used, why do manufacturing overhead costs often shift from high-volume products to low-volume products?

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• 79:How can the activity rates (i.e., cost per activity) for the various activities be used to target process improvements?

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• 710:Why is the form of activity-based costing described in this chapter unacceptable for external financial reports?

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