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| 1 | |
A process layout organizes the elements of a production process so that similar processes and functions are separated. |
| | A) | True |
| | B) | False |
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| 2 | |
In a volume-based costingsystem, costs areassigned to products on the basis of a single activity base that is related to volume. |
| | A) | True |
| | B) | False |
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| 3 | |
Activity-based costing (ABC) systems involve tracing costs of resources to activities and then to products or services based on the amount of use of those activities. |
| | A) | True |
| | B) | False |
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| 4 | |
In the first stage of an ABC system, the overhead costs are assigned to each activity comprise an activity pool. |
| | A) | True |
| | B) | False |
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| 5 | |
Unit-level activities are those activities that are performed on most but not all units of production. |
| | A) | True |
| | B) | False |
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| 6 | |
Transferring raw material to work in process is an example of a unit-level activity. |
| | A) | True |
| | B) | False |
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| 7 | |
Activities that may support all the organization's processes are called facility-level activities. |
| | A) | True |
| | B) | False |
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| 8 | |
Activities such as machine setup, purchasing, and material handling may be batch-level activities. |
| | A) | True |
| | B) | False |
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| 9 | |
Plant depreciation, property taxes, and plant maintenance are examples of batch-level activity costs. |
| | A) | True |
| | B) | False |
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| 10 | |
A product-sustaining level activity is performed every time a new unit or batch of products is produced. |
| | A) | True |
| | B) | False |
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| 11 | |
Facility-level activities take place in the second stage of a two-stage ABC system. |
| | A) | True |
| | B) | False |
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| 12 | |
Classifying activities into unit-level, batch-level, product-sustaining level, and facility-level activities is storyboarding. |
| | A) | True |
| | B) | False |
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| 13 | |
Pool rates are established in the second stage of a two-stage ABC system. |
| | A) | True |
| | B) | False |
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| 14 | |
The second stage of a two-stage ABC system in which more than one product is produced involves three steps to determine the activity cost per unit. |
| | A) | True |
| | B) | False |
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| 15 | |
Using a single, volume-based cost driver is one of the major reasons why a traditional product-costing system will distort product costs when diverse products are produced. |
| | A) | True |
| | B) | False |
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| 16 | |
When manufacturing a diverse product line, a consumption ratio would be appropriate for the assignment of costs pools to products. |
| | A) | True |
| | B) | False |
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| 17 | |
When consumption ratios widely differ between activities, a single cost driver will accurately assign the overhead costs. |
| | A) | True |
| | B) | False |
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| 18 | |
When there is a large proportion of non-unit-level activity, a unit-level cost driver will not be able to assign the costs of non-unit-level activities accurately. |
| | A) | True |
| | B) | False |
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| 19 | |
One important factor in selecting a cost driver is the degree of correlation between consumption of the activity and consumption of the cost driver. |
| | A) | True |
| | B) | False |
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| 20 | |
Cost drivers for activity pools are identified in the first stage of a two-stage ABC system. |
| | A) | True |
| | B) | False |
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| 21 | |
The identification and implementation of cost drivers involves cost-benefit trade-offs between cost and accuracy. |
| | A) | True |
| | B) | False |
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| 22 | |
A selected cost driver can cause dysfunctional behavioral effects. |
| | A) | True |
| | B) | False |
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| 23 | |
A procedure which results in a visual representation of activities and relationships among the activities is called story telling. |
| | A) | True |
| | B) | False |
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| 24 | |
A bill of activities is a complete listing of the activities identified and used in an organization's ABC system. |
| | A) | True |
| | B) | False |
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| 25 | |
A bill of materials is a list of the materials required for a product. |
| | A) | True |
| | B) | False |
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| 26 | |
In an ABC system, an effort is made to account for as many costs as possible as direct costs of production. |
| | A) | True |
| | B) | False |
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| 27 | |
One of the signals that a new costing system is needed is the unwillingness of marketing people to use reported product costs in making pricing decisions. |
| | A) | True |
| | B) | False |
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| 28 | |
An optimal information system occurs when the cost of design, implementation, and maintenance of the information system are equal to the cost of inferior decisions resulting from inaccurate information. |
| | A) | True |
| | B) | False |
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| 29 | |
Service industry companies do not have a need to separate their service production activities into unit-level or batch-level activities. |
| | A) | True |
| | B) | False |
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