CH 7
Which of the following activities would be classified as a batch level activity a) Setting up equipment b) Designing a new product c) Training employees d) Milling a part required for the final product
a) Setting up equipment
A duration driver is a) a simple count of the number of times an activity occurs b) an activity measure that is used for the life of the company c) a measure of the amount of time required to perform an activity d) an activity measure that is used for the life of an activity based costing system
c) a measure of the amount of time required to perform an activity
Designing a new product is an example of a(n) a) unit level activity b) batch level activity c) product level activity d) organization sustaining activity
c) product level activity
Unit level activities are preformed each time a unit is produced
True
Personnel administration is an example of a) unit level activity b) batch level activity c) product level activity d) organization sustaining activity
D) Organization sustaining activity
organization sustaining activities are activities of the general organization that support specific products
False
In activity based costing some manufacturing costs may be excluded from the product costs
True
Which of the following is not a limitation of activity based costing a) Maintaining an activity based costing system is more costly than maintaining a traditional direct labor based costing system b)changing from a traditional direct labor based costing system to an activity based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers c) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity based system. This results in overstated costs d) More accurate product costs may result in increasing the selling prices of some products
d) More accurate product costs may result in increasing the selling prices of some products
Property taxes are an example of a cost that would be considered to be: a) unit level b) batch level c) product level d) organization sustaining
d) organization sustaining
