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Multiple Choice Quiz
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1
Which of the following statements is correct?
A)Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct labor-hours.
B)Activity rates in activity-based costing are computed by dividing costs from the first-stage allocations by the activity measure for each activity cost pool.
C)An activity-based costing system is generally easier to implement and maintain than traditional costing system.
D)One of the goals of activity-based management is the elimination of waste by allocating costs to products that waste resources.
2
All of the following are examples of batch-level activities except:
A)Clerical activity associated with processing purchase orders to produce an order for a standard product.
B)Purchase order processing.
C)Setting up equipment.
D)Worker recreational facilities.
3
All of the following are examples of product-level activities except:
A)Advertising a product.
B)Human resource management.
C)Parts administration.
D)Testing a prototype of a new product.
4
Bangayan Company uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected activity for one of the company's three activity cost pools are as follows.
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The activity rate under the activity-based costing system for this activity is closest to:
A)$4.00.
B)$8.59.
C)$18.00.
D)$20.00.
5
Ekcer Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs totaled $40,000 and expected activity equals 2,500 for this activity cost pool Actual activity for the current year was 2,490. The amount of overhead applied for this activity during the year was closest to:
A)$36,300.
B)$39,840.
C)$40,000.
D)$96,190.
6
Chibucos Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools.
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The activity rate under the activity-based costing system for Activity 3 is closest to:
A)$29.32.
B)$30.00.
C)$33.33.
D)$41.53.
7
Chibucos Company has two products: A and B. The annual production and sales level of Product A is 9,094 units. The annual production and sales level of Product B is 15,826. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools. (Note that this is the same data that was provided for the previous question.)
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The overhead cost per unit of Product A under activity-based costing is closest to:
A)$1.83.
B)$1.98.
C)$5.00.
D)$10.00.
8
Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:
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Actual costs and activities for the current year were as follows.
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(Note that this is the same information as provided for the previous question.) The total amount of overhead applied during the year was closest to:
A)$248,508.
B)$248,988.
C)$250,155.
D)$251,334.
9
Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools. (Note that this is the same data that was provided for the previous question.)
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Actual costs and activities for the current year were as follows.
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The total amount of the debits to the Manufacturing Overhead during the year was closest to:
A)$248,508.
B)$248,988.
C)$251,110.
D)$250,334.
10
When there are batch-level or product-level costs, in comparison to a traditional cost system, an activity-based costing system ordinarily will shift costs from:
A)High-volume to low-volume products.
B)Low-volume to high-volume products.
C)Specialized to standardized products.
D)Standardized to specialized products.







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