Chapter 4 Quiz

normal costing system.

A costing system that uses actual costs for direct materials and labor and predetermined overhead rates to apply overhead is called a(n)

Budgeted annual overhead / budgeted annual driver level

A predetermined overhead rate is calculated using which of the following formulas?

batch-level activity.

If activity-based costing is used, materials handling would be classified as a

only the most expensive activities are allocated using appropriate cause-and-effect drivers.

In an approximately relevant ABC system

allocated to work in process, finished goods, and cost of goods sold.

Material amounts of underapplied or overapplied overhead should be

activity-based pool rates.

More accurate product costing information is produced by assigning costs using

both "non-unit-based overhead costs are a significant proportion of total overhead" and "the consumption ratios differ between unit-based and non-unit-based input categories".

Product costs can be distorted if a unit-based activity driver is used and

All of these choices are correct.: a.product size. b.setup times. c.product complexity.

Products might consume overhead in different proportions due to differences in

consumption ratio.

The proportion of an overhead activity consumed by a product is the

different products consume resources differently.

Unit-level cost drivers create distortions when

direct materials and direct labor directly to products and assigns overhead to departmental pools which are assigned to products using predetermined overhead rates based on unit-level drivers.

Unit-level product costing assigns

activities and then tracing costs to cost objects.

Activity-based costing assigns cost to cost objects by first tracing costs to