ABC - WILEY

Question 1

Cost driver is a factor or activity that has a direct cause-effect relationship with the resources consumed

Answer 1

True

Question 2

Cost driver for activity of purchasing

Answer 2

of purchase orders issued

Question 3

Facility level cost driver for heating

Answer 3

Floor space

Question 4

Machining parts

Answer 4

Unit level

Question 5

Product design

Answer 5

Product level

Question 6

Plant maintenance

Answer 6

Facility level

Question 7

Machine set-up

Answer 7

Batch level

Question 8

Assembling parts

Answer 8

Unit level

Question 9

Purchasing raw materials

Answer 9

Batch level

Question 10

Property taxes

Answer 10

Facility level

Question 11

Painting

Answer 11

Unit level

Question 12

Activity-based overhead rate for services is calculated by

Answer 12

Dividing estimated overhead per activity by expected use of cost drivers per activity

Question 13

ABC focuses on

Answer 13

The activities performed in producing a product

Question 14

All overhead costs related to the activity must be driven by the cost driver used to assign costs by products

Answer 14

All overhead costs related to the activity should respond proportionally to changes in the activity level of the cost driver

Question 15

ABC is an approach for allocating overhead to products or services

Answer 15

true

Question 16

Direct labour is an appropriate basis for allocating costs to products if it represents the best-cost driver for that cost

Answer 16

true