MULTIPLE CHOICE $-36$ POINTS $(3$ POINTS EACH$)$

A $1$ Operations costing in job$-$order costing.

C$)$ treats as in job$-$order costing.

D$)$ treats direct materials and conversion costs in a manner consistent with job$-$order costing

$2.$ A basic assumption of activity$-$based costing is that

A$)$ products and services cost money

B$)$ activities cost money

C$)$ activities consume resources

D$)$ products and services consume resources

$3.$ The method for allocating service department costs that best recognizes the mutual services rendered to other service departments is the:

A$)$ dual$-$allocation method

B$)$ direct allocation method

C$)$ reciprocal method

$($D$)$ step$-$down or reciprocal method

B

$4.$ The most important factor in determining whether a product should be treated as a byprod versus a main product in a joint process is

A$)$ the level of profit margin expected on the product

B$)$ the relative sales value versus main products

C$)$ that byproducts are generally not intended to be produced

D$)$ not subject to management discretion

$q,6.$ The principal disadvantage of using the physical quantity method of allocating joint

A$)$ Costs assigned to inventories may have no relationship to value

B$)$ Physical quantities may be difficult to measure

C$)$ Additional processing costs become more significant

D$)$ GAAP does not allow this method to be used

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