Question 1 Activity-based costing (ABC) differs from other costing approaches in that it more accurately measures the cost of activities: inversely proportional to the volume of outputs produced directly proportional to the volume of outputs produced. not proportional to the volume of outputs produced. that are non-value adding. Question 2 Which of the following is not considered a benefit of activity-based costing? Decreased production activity levels More accurate unit cost information. A better understanding of manufacturing overhea Improved product pricing decisions. Question3 Which of the following is not normally associated with activity-based costing? Multiple cost drivers High direct labor costs relative to manufacturing overhead costs. Reduction of non-value-adding costs. Activity cost pools. Question 4 Engineering change orders, equipment maintenance, and product development costs are examples of: facility-level costs batch costs. unit costs. product-level costs Question 5 When deciding to purchase a new cutting machine or continue using the existing machine, the following costs are all relevant EXCEPT the: cost of the old machine. annual savings in operating costs if the new machine is purchased disposal (salvage) value of the old machine. cost of the new machine