Question :
72.Which of the following statements true with regard to activity-based : 1258552
72.Which of the following statements is true with regard to activity-based costing rates?
A. The premise of ABC is that activities are what cause costs to be incurred.
B. ABC is another way to refer to a multiple departmental rate situation.
C. There one basic stage to ABC.
D. ABC is simpler and less expensive to implement than other traditional methods of allocating overhead costs.
E. All cost drivers used to determine the rates will be unit-level drivers.
73.What is the reason for pooling costs?
A. To shift costs from low-volume to high-volume products.
B. It is a budgeting technique designed to accurately track fixed costs.
C. Determining a pool rate for all costs incurred by the same activity reduces the number of cost assignments required.
D. This procedure helps to determine which costs are directly related to production volume.
E. It simplifies departmental overhead costing procedures.
74.Which of the following are advantages of using the plantwide overhead rate method?
A. The use of cost pools is considerably more accurate than other overhead allocations.
B. The necessary information is readily available.
C. It is more accurate than traditional overhead allocations.
D. Each department has its own overhead rate and its own allocation base.
E. It takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources.
75.Which of the following companies would be best served by a plantwide overhead rate?
A. A company that manufactures many different products and whose operations are an equal mix of labor and mechanized work.
B. A company that manufactures few products and whose operations are labor intensive.
C. A company that manufactures many different products and whose operations are highly mechanized.
D. A company whose products use overhead resources in very different ways.
E. A company whose products differ in batch size and complexity and consume different amounts of overhead resources.
76.Which of the following is true?
A. Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.
B. The departmental overhead rate is not usually based on measures closely related to production volume.
C. The departmental overhead rate is most accurate in assigning overhead costs that are not driven by production volume.
D. Allocated overhead costs will be the same no matter which allocation method is used.
E. When cost analysts are able to logically trace cost objects to costs, costing accuracy is improved.
77.Which of the following is a disadvantage of the departmental overhead rate method?
A. The departmental overhead rate method assigns overhead on the basis of volume-related measures.
B. The departmental overhead rate method is more refined than the plantwide overhead rate method.
C. The departmental overhead rate method does not assign overhead on the basis of volume-related measures.
D. The departmental overhead rate method is simpler and less costly to implement than the plantwide rate method.
E. There are no disadvantages of the departmental overhead rate method.
78.Which of the following is not true?
A. The departmental overhead method assigns overhead on the basis of volume-related measures.
B. The departmental overhead rate method is more refined than the plantwide overhead rate method.
C. Overhead costing accuracy is improved by the use of multiple departmental rates rather than a single overhead rate.
D. The departmental overhead rate method does not assign overhead on the basis of volume-related measures.
E. The departmental overhead rate method is more costly to implement than the traditional overhead rate method.
79.What are three advantages of activity-based costing over traditional volume-based allocation methods?
A. Ease of use, more accurate product costing, and more effective cost control.
B. Fewer allocation bases, ease of use, and a direct correlation to production volume.
C. More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.
D. More accurate product costing, fewer cost objects, and a direct correlation to production volume.
E. More accurate product costing, ease of use, less costly to implement.
80.What are the main advantages of traditional volume-based allocation methods compared to activity-based costing?
A. Traditional volume-based methods are easier to use and less costly to implement and maintain.
B. Traditional volume-based methods are more accurate and allowed by GAAP.
C. Traditional volume-based methods are less accurate and easier to use.
D. Traditional volume-based methods are harder to use and more costly to implement and maintain.
E. There are no advantages to using traditional volume-based methods.
81.K Company estimates that overhead costs for the next year will be $2,900,000 for indirect labor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80,000 direct labor hours are planned for this next year, what is the company’s plantwide overhead rate?
A. $.02 per direct labor hour.
B. $46.25 per direct labor hour.
C. $36.25 per direct labor hour.
D. $10 per direct labor hour.
E. $.10 per direct labor hour.
