t/f
1. A drawback of an activity-based costing (ABC) system is the complexity of
measurements necessary to implement and update the system. ( t )
2. A cost hierarchy is a categorization of costs into single cost pools ( f)
3. Cleaning and maintenance costs are direct batch level cost because they are used
only one time ( f)
4. ABC gives management insight into the cost structures for making and selling diverse
products ( t)
M/ch
1. Costs and are resources sacrificed on activities to support individual products or
services.
a. Product-Sustaining Costs
b. Batch-Level Costs
c. Facility-Sustaining Costs
d. A+ b
2. Rent is example for :
a. Product-Sustaining Costs
b. Batch-Level Costs
c. Facility-Sustaining
d. Facility-Sustaining Costs
3. When ABC is implemented , it follows 7 step . which one is step 5 :
a. Compute the rate per unit.
b. Compute the indirect costs allocated to the products.
c. Identify the indirect costs
d. Compute the costs of the products.
4. Which one is the main limitation of ABC :
a. estimate costs of activity pools
b. Complex products appear to be very profitable
c. identify and measure cost drivers for these pools.
d. A+ c