Chapter 4

Question 1

Assigning direct materials or direct labor costs to products poses no particular challenge since they can be assigned using

Answer 1

Direct Tracing

Question 2

are factors that measure the demands placed on unit-level activities.

Answer 2

Unit-Based Drivers

Question 3

are activities performed each and every time a unit of a product is produced.

Answer 3

Unit-Level Activities

Question 4

assign all overhead costs to products from a single plantwide pool using a single unit-level driver such as direct labor hours.

Answer 4

Plant-wide Rates

Question 5

assigned to products by multiplying the plantwide rate by the actual amount of direct labor hours used by each product.

Answer 5

Overhead Costs

Question 6

overhead costs are assigned to individual production departments, creating departmental overhead cost pools.

Answer 6

Departmental Rates

Question 7

If the amount of overhead applied to production exceeds the actual overhead incurred, overhead is said to be

Answer 7

Over-Applied

Question 8

If the amount of overhead applied to production is less than the actual overhead cost incurred, overhead is said to be

Answer 8

Under Applied

Question 9

assign the overhead variance to cost of goods sold.

Answer 9

if IMMATERIAL

Question 10

prorate among the ending balances in work-in-process, finished goods inventory, and cost of goods sold.

Answer 10

If MATERIAL

Question 11

can help improve the accuracy of product costing when:

1. Multiple products are produced.
2. There is significant product diversity.
3. Non-unit-level overhead is a significant percentage of production cost.

Answer 11

Activity-Based Costing Model

Question 12

represent actions taken or work performed by equipment or people for other people.

Answer 12

Activities

Question 13

is an activity that is consumed by a final cost object such as a product or customer.

Answer 13

Primary Activity

Question 14

is one that is consumed by intermediate cost objects such as primary activities, materials, or other secondary activities.

Answer 14

Secondary Activity

Question 15

names activities, describes the tasks that make up the activities, classifies the activities as primary or secondary, lists the users (cost objects), and identifies a measure of activity output (activity driver).

Answer 15

Activity Dictionary

Question 16

are those that are performed each time a unit is produced

Answer 16

Unit-Level Activity

Question 17

are those that are performed each time a batch of products is produced.

Answer 17

Batch-Level Activity

Question 18

to be produced. These activities and their costs tend to increase as the number of different products increases. Examples of product-level activities include engineering changes, developing product-testing procedures, introducing new products, and expediting goods.

Answer 18

Product-Level Activity

Question 19

are those that sustain a factory’s general manufacturing processes. Examples of facility-level activities include plant management, landscaping, maintenance, security, property taxes, and plant depreciation.

Answer 19

Facility-Level Activity

Question 20

refers to the proportion of an activity used by each product. The steps that should be followed to achieve the desired simplification are:

Answer 20

Expected Global Consumption Ratio