Question : MULTIPLE CHOICE QUESTIONS 31.              Which of the following not typical of : 1311679

MULTIPLE CHOICE QUESTIONS

31.              Which of the following is not typical of traditional costing systems?

a.Use of a single predetermined overhead rate.

b.Use of direct labor hours or direct labor cost to assign overhead.

c.Assumption of correlation between direct labor and incurrence of overhead cost.

d.Use of multiple cost drivers to allocate overhead.

32.              In traditional costing systems, overhead is generally applied based on

a.direct labor.

b.machine hours.

c.direct material dollars.

d.units of production.

33.              An activity that has a direct cause-effect relationship with the resources consumed is a(n)

a.cost driver.

b.overhead rate.

c.cost pool.

d.product activity.

34.              Which best describes the flow of overhead costs in an activity-based costing system?

a.Overhead costs ? direct labor cost or hours ? products

b.Overhead costs ? products

c.Overhead costs ? activity cost pools ? cost drivers ? products

d.Overhead costs ? machine hours ? products

35.              The costs that are easiest to trace directly to products are

a.direct materials and direct labor.

b.direct labor and overhead.

c.direct materials and overhead.

d.none of the above; all three costs are equally easy to trace to the product.

36.              Often the most difficult part of computing accurate unit costs is determining the proper amount of _________ to assign to each product, service, or job.

a.direct materials

b.direct labor

c.overhead

d.direct materials and direct labor

37.              Predetermined overhead rates in traditional costing are often based on

a.direct labor cost for job order costing and machine hours for process costing.

b.machine hours for job order costing and direct labor cost for process costing.

c.multiple bases for job order costing and direct labor cost for process costing.

d.multiple bases for both job order costing and process costing.

38.              Direct labor is sometimes the appropriate basis for assigning overhead cost to products. It is appropriate to use direct labor when which of the following is true?

(1)Direct labor constitutes a significant part of total product cost.

(2)A high correlation exists between direct labor and changes in the amount of overhead costs.

a.(1) only

b.(2) only

c.Either (1) or (2)

d.Both (1) and (2)

39.              Advances in computerized systems, technological innovation, global competition, and automation have changed the manufacturing environment drastically by

a.increasing direct labor costs and increasing overhead costs.

b.increasing direct labor costs and decreasing overhead costs.

c.decreasing direct labor costs and decreasing overhead costs.

d.decreasing direct labor costs and increasing overhead costs.

40.              Activity-based costing

a.allocates overhead to activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers.

b.accumulates overhead in one cost pool, then assigns the overhead to  products and services by means of a cost driver.

c.assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools.

d.allocates overhead directly to products and services based on activity levels.