Exam 6: Activity-Based Costing and Activity-Based Management

Managers can use steps as a tool in simple costing systems when they have a single indirect cost pool because it helps them to allocate indirect costs using a single indirect-cost rate.Which of the following is not one of the steps to guide them in this process?

The Chesapeake Organization reported $400,000 of indirect-cost pool in design activity.The manager reported a cost-allocation base of 110 parts per square feet. Required: Compute the amount of design activity per part-square foot.

Refined costing systems reduce the use of broad averages for assigning the cost of resources to cost objects.

The growing demand for customized products,which has led managers to ________ the variety of products and services their companies offer.

Allocating costs to products by measuring the cost-allocation bases of different activities used by different products leads to more accurate production costs.

In indirect cost pools,machine operations costs are ________.

Global surveys of company practices suggest that activity-based costing implementation varies among companies.

Managers set cost reduction targets in terms of reducing the cost per unit of the cost-allocation base in different activity areas.

When managers structure activity cost pools more finely with cost drivers for each activity cost pool as the cost-allocation base,it leads to more accurate costing of activities.

The costing system that refines a costing system by identifying individual activities as the fundamental cost object is ________.

Management accountants use the cost hierarchy to first calculate the total costs of each product and then they derive per-unit costs by dividing total costs by the number of units produced.

Which of the following is not a behavioral issue that managers consider when they implement activity-based costing systems?

As product diversity and direct costs increase,it is usually best to switch away from a ________ cost system and move to a ________ cost system.

Peanut-butter costing ________.

The costs of activities related to a group of units of a product or service rather than each individual unit of product or service are ________.

Zell Company produces a special hammer for carpenters.The budgeted total cost in the indirect-cost pool is $75,000.The budgeted total quantity of cost allocation base is 30,000.What is the budgeted indirect cost rate?

Simple peanut-butter costing broadly averages or spreads the cost of resources uniformly to cost objects.

All costs can be directly identified with a particular activity.

Simple costing systems that allocate indirect costs are most likely to use which of the following steps first?

Which of the following is not true about the benefits and costs of activity-based costing systems?