Question 1 (1 point)

True or False: For activity-based costing to be successfully implemented, it is ideal to establish homogeneous cost pools.

True

False

Question 2 (1 point)

If activity-based costing is used, insurance on the plant would be classified as a ________.

a	unit-level activity.
b	batch-level activity.
c	product-level activity.
d	facility-level activity.

Question 3 (1 point)

True or False: In a traditional volume-based costing system, a low-volume, relatively more complex product is likely to suffer from cost distortion.

True

False

Question 4 (1 point)

True or False: In activity-based costing, a plant-wide overhead rate is used to apply overhead to products.

True

False

Question 5 (1 point)

True or False: In a manufacturing company employing ABC for a number of units produced, setups of machinery would be classified as a batch-level activity.

True

False

Question 6 (1 point)

Products might consume overhead in different proportions due to ________.

a	differences in product size
b	differences in setup times
c	differences in product complexity
d	all of the above

Question 7 (1 point)

A(n) _______________ system first summarizes overhead costs in pools then attributes to drivers in order to develop an allocation rate.

a	direct costing
b	variable costing
c	traditional costing
d	activity-based costing

Question 8 (1 point)

More accurate product costing information is produced by assigning costs using ________.

a	volume-based, plant-wide rate
b	volume-based, departmental rates
c	activity-based pool rates
d	all of the above

Question 9 (1 point)

The use of unit-based activity drivers to assign costs tends to ________.

a	overcost low-volume products.
b	overcost high-volume products.
c	undercost all products.
d	overcost all products.

Question 10 (1 point)

Production-cost cross-subsidization results from ________.

a	allocating indirect costs to multiple products
b	assigning traced costs to each product
c	assigning costs to different products using varied costing systems within the same organization
d	assigning broadly averaged costs across multiple products without recognizing amounts of resources used by which products