exam1 chp 5 questions Flashcards
1
Q
Mike’s Motors manufactures small gas motors. Mike has identified the following activities:
a. Design
b. Regulatory approval
c. Machine set up
d. Staff annual picnic
e. Electricity
f. Sales commission, (percent of sale price)
classify each as level of activity, unit, batch, product, facility
A
a—product
b. product
c. BATCH
d. facility
e. UNIT
f. UNIT
2
Q
- In traditional costing systems, direct labour cost is often used for the assignment of all ____________________.
A
- overhead costs
3
Q
- A __________________ is any activity that has a direct cause-effect relationship with the resources consumed.
A
- cost driver
4
Q
- In activity-based costing, overhead costs are allocated to ____________________, then assigned to products.
A
- activity cost pools
5
Q
- The number of ___________________ is an appropriate cost driver for the ordering and receiving activity cost pool.
A
- purchase orders
6
Q
- The primary benefit of activity-based costing is ___________________ product costing.
A
- more accurate
7
Q
- When product lines differ greatly in volume and manufacturing complexity, a switch from traditional costing to ___________________ is indicated.
A
- activity-based costing
8
Q
- ______________________ increase the worth of a product or service to customers.
A
- value-added activities
9
Q
- In the hierarchy of activity levels, the four levels are __________, ___________, ____________, and _____________.
A
- unit, batch, product, facility
10
Q
- Equipment setups are a ______________-level activity.
A
- batch
11
Q
____ 1. Allocates overhead to multiple activity cost pools, then assigns the activity cost pools to products.
A
activity based costing
12
Q
____ 2. An activity that has a direct cause-effect relationship with the resources consumed
A
cost driver
13
Q
____ 3. Increases the worth of a product or service to customers
A
value-added activity
14
Q
____ 4. Should be eliminated or reduced.
A
Non-value-added activity
15
Q
- Plant management.
A
Facility-level activity
