acg exam 2

Which of the following is most likely to be a cost driver for a packaging and shipping activity?

Number of orders

ABC Co.,is analyzing whether to expand operations by adding a new product line. Which of the following choices correctly identifies the costs that should be considered in this decision?

Opportunity cost only

Which of the following cost drivers would best be associated with the activity of a physician time in a medical clinic?

Physician minutes with a patient

ABC Production manufactures products X and Y and has been applying overhead on the basis of direct labor hours. Product X is a high-volume product and relatively simplistic in nature. Product Y is a low-volume product that requires a variety of complex manufacturing procedures. What would an activity-based costing system likely disclose about products X and Y?

Product X was overcosted and product Y was undercosted

Which of the following would activity-based costing most likely lead to?

Raising the sale price of low-colume products

A cost not relevant to deciding whether to purchase a new machine is:

The cost of the old machine

Which of the following product situations is better suited to job order costing than to process costing?

The costs are easily traced to a specific product.

Which of the following is a reason a company would implement activity-based costing?

They want to improve the data on which decisions are made.

A job order costing system is most likely used by which of the following?

an accounting firm specializing in tax returns

predetermined overhead rate

computes the overhead applied to each job

Activity-based costing systems:

frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product

Manufacturing overhead:

is a pool of indirect production costs that must somehow be attached to each unit manufactured

Activity-based costing systems:

often reveal products that were under- or over-costed by traditional costing systems

Factors in a decision problem that cannot be expressed in numerical terms are:

qualitative in nature

Which of the following is not a qualitative decision that should be considered in an outsourcing decision?

relevant costs

The cost of inventory owned by a company is considered a:

sunk cost

Which of the following types of companies would most likely use process costing?

textile manufacturers

job order costing

the cost accounting system used by law firms

process costing

the cost accounting system used by pet food manufacturers

Which if the following costs are relevant to a decision making situation?

the cost of special electrical wiring in an equipment acquisition decision

overapplied overhead

the result when the actual overhead is less than the amount assigned to each specific job

underapplied overhead

the result when the actual overhead is more than the amount assigned to each specific job

In activity-based costing system, direct materials used would typically be classified as a:

unit-level cost