Acct ch17

The first step in applying activity-based costing is

identifying the activities.

One of the characteristics of activity-based costing is that it allows___________(more, less) effective control over costs.

more

Each of the following are types of____________allocation methods: plantwide rate method, departmental overhead rate method and activity-based costing method.

overhead

The _________________overhead rate method uses a different overhead rate per production department.

Departmental

(Identifying, Assigning,Tracing) activities is the first step in applying activity-based costing.

Identifying

The plantwide and departmental overhead rate methods are based on readily available information such as direct_______ hrs or ____________hrs

Labor; machine

Strengths of the departmental overhead rate method and the plantwide overhead method include all of the following: (Check all that apply.)

They comply with GAAP. They are based on readily available information. They are easy to implement.

True or false: The cost object of the plantwide overhead rate method is the unit of product.

True

The basic principle of activity-based costing is that a(n)activityBlank 1Blank 1 activity , Correct Unavailable is what causes overhead cost to be incurred.

activites

In order for a service provider to use activity-based costing, they should classify costs by_______level

activity

The basis of the activity-based costing method is a(n)

activity

ABC can be used by service providers who usually classify costs by

activity level

Activities causing overhead include all of the following:

batch-level facility-level unit-level

Advantages of the activity-based costing include: Check all that apply.

better production and pricing decisions more effective overhead cost control accurate assignment of costs to products

A report which focuses on individual customers and shows total profit margin generated by specific customers is known as a____________profitability report.

customer

A report which focuses on providing gross profit margin per customer, is referred to as a

customer profitability report.

All of the following are types of activities which cause overhead except:

customer-level

The overhead rate method which uses a different overhead rate for each department is the

departmental method

Which of the following are a type of overhead allocation method? (Check all that apply).

plantwide overhead rate method activity-based costing method departmental overhead rate method

The cost object of the cost assignment under the plantwide overhead rate method is the

unit of product