accy 202 test 2

Activity-based costing often shifts overhead costs from large volume, standardized products to low-volume, specialty products that consume disproportionate resources.
true
ABC can be used to assign costs to any cost object that is of management interest.
true
The final step of activity-based costing assigns overhead costs to pools rather than to products.
true
An advantage of using the plantwide overhead rate method?
The necessary information is readily available.
what company would be best served by a plantwide overhead rate?
A company that manufactures few products and whose operations are labor intensive.
A system of accounting in which the costs of each process are accumulated separately and then assigned to the units of product that passed through the process is a:
process cost accounting
A company that applies process costing is most frequently characterized by:
Homogeneous
An organizational unit of a factory that has the responsibility for partially manufacturing or producing a product is called a:
Production Department
Direct material costs are recorded:
Directly to Goods in Process Account
Direct labor and indirect labor are recorded, respectively, to:
Goods in Process and Factory Overhead
In a process costing operation, the direct labor of a production department includes
All labor used exclusively by that department, even if the labor is not applied to the product itself.
All labor used exclusively by that department, even if the labor is not applied to the product itself.
There may be over or underapplied overhead.
To compute an equivalent unit of production, one must be able to reasonably estimate:
The percentage of completion
A method of assigning overhead costs to a product using a single overhead rate is:
plantwide overhead rate method
Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?
Departmental overhead rate method and activity-based costing
Which of the following would not be considered a product cost?
cost accountants salary
Overhead costs:
Cannot be traced to units of product in the same way that direct labor can.
The cost object of the plantwide overhead rate method is:
The unit of product
Which of the following statements is true with regard to the plantwide overhead rate method?
The rate is determined using volume-related measures.
The cost object(s) of the departmental overhead rate method is
The production departments in the first stage and the unit of product in the second stage.
Which of the following statements is true with regard to the departmental overhead rate method?
It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments.
The cost object(s) of the activity-based costing method is(are):
The production activities in the first stage and the unit of product in the second stage.
From an ABC perspective, what causes costs to be incurred?
Activities
Which of the following statements is true with regard to activity-based costing rates?
The premise of ABC is that activities are what cause costs to be incurred.
What is the reason for pooling costs?
Determining a pool rate for all costs incurred by the same activity reduces the number of cost assignments required.
Which of the following are advantages of using the plantwide overhead rate method?
The necessary information is readily available.
Which of the following is a disadvantage of the departmental overhead rate method?
The departmental overhead rate method assigns overhead on the basis of volume-related measures.
What are three advantages of activity-based costing over traditional volume-based allocation methods?
More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.
What are the main advantages of traditional volume-based allocation methods compared to activity-based costing?
Traditional volume-based methods are easier to use and less costly to implement and maintain
A cost that remains the same in total even when volume of activity varies is a
Fixed cost
A cost that changes in total proportionately to changes in volume of activity is a(n):
variable cost
A cost that can be separated into fixed and variable components is called a:
Mixed cost
A target income refers to:
income planned for a future period
The margin of safety is the excess of:
Expected sales over break-even sales.
The excess of expected sales over the sales level at the break-even point is known as the:
Margin of Safety
Using a traditional costing approach, which of the following manufacturing costs are assigned to products?
Variable manufacturing overhead, direct materials, direct labor, and fixed manufacturing overhead.
Which of the following statements is true regarding absorption costing?
It assigns all manufacturing costs to products.
Which of the following statements is true regarding variable costing?
Only manufacturing costs that change in total with changes in production level are included in product costs.