Accounting 3 exam

Companies that switch to ABC often find they have been 1. overpricing some products 2. possibly losing market share to competitors 3. been sacrificing profitability by underpricing some products 4. all of these

all of these

Use of activity-based costing will result in the development of 1. no overhead rates; overhead rates are not used in activity-based costing 2. no overhead rate based on direct labor hours 3. one planted activity-based overhead rate. 4. multiple activity-based overhead rates.

multiple activity-based overhead rates.

In traditional costing systems, overhead is generally applied based on 1. Direct Material Dollars 2. Machine Hours 3. Units of production 4. Direct Labor

Direct Labor

The first step in activity-based costing is to 1. Identify cost driver that has a strong correlation to the activity cost pool 2. Identify and classify activities involved with the manufacture of specific products 3. compute the activity-based overhead rate per cost driver 4. assign overhead costs to precepts, using overhead rates determined for each cost pool

Identify and classify activities involved with the manufacture of specific products

Ordering materials, setting up machines, assembling products, and inspecting products are examples of 1. Direct Labor costs 2. non manufacturing activities 3. cost drivers 4. overhead cost pools

Overhead cost pools