chapter 3 t/f
When a company shifts from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product costs of high volume products typically decrease whereas the unit product costs of low volume products typically increase.
true
If a company has a great deal of product diversity, activity-based costing will generally yield more accurate product costs than traditional overhead application rates based on direct labor or machine hours.
true
In activity-based costing, there are a number of activity cost pools, each of which is allocated to products using its own unique measure of activity.
true
Product-level activities relate to specific products and typically must be carried out regardless of how many batches are run or units of product are made.
true
The activity rates in activity-based costing are not intended to set targets for how quickly a task should be completed.
true
The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to activity cost pools.
true
Direct labor-hours should never be used as a measure of activity in an activity-based costing system.
false
Facility-level activities are activities that support specific products.
false
In activity-based costing, unit product costs computed for external financial reports include manufacturing overhead costs that are computed by multiplying activity rates by the direct labor-hours required to produce a product.
false
In the second-stage allocation in activity-based costing, costs that were not allocated in the first stage are assigned to the company's most profitable products.
false
The activity rates in activity-based costing are computed by dividing the overhead in each production department by its direct labor-hours.
false
Costs classified as batch-level costs should depend on the number of batches processed rather than on the number of units produced, the number of units sold, or other measures of volume.
true