Chapter 10

Question 1

Activity-based Costing (ABC)

Answer 1

a method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs

Question 2

Batch-level

Answer 2

activities that take place in order to support a batch or production run, regardless of the size of the batch

Question 3

Cost Drivers

Answer 3

Numerical measure used to reflect the amount of a specific cost that is associated with a particular activity

Question 4

Cost Pool

Answer 4

total cost being generated by a specific overhead cost activity

Question 5

Facility Support Activities

Answer 5

activities necessary to have a facility in order to participate in the development and production of products or services; activities are not related to any particular line of products or services

Question 6

Product-line Activities

Answer 6

activities that take place in order to support a product line, regardless of the number of batches or individual units produced

Question 7

Unit-level Activities

Answer 7

activities that take place each time a unit of product is produced