Activity-Based Costing Concepts

Front

A cost driver is

Back

A factor influencing cost incurrence

Front

In ABC, allocation rates are determined by dividing

Back

Total cost by total activity

Front

Which industry is most likely to benefit from ABC? Options: Retail, Manufacturing, Agriculture, Real estate

Back

Manufacturing

Front

Which is an example of an allocation base? Options: Direct labor hours, Square footage, Number of machine setups, All of the above

Back

All of the above

Front

ABC often reveals that traditional costing

Back

Undercosts simple products, Overcosts complex products, Misallocates indirect costs.

Front

The term 'cost pool' refers to

Back

Grouped activities sharing the same driver

Front

Which of these activities is value-added?
Options:
Inspection of defective products,
Assembly of components,
Storage of finished goods,
Reworking faulty items

Back

Assembly of components

Front

What is the first step in implementing ABC?

Back

Analyze activities

Front

Which of the following is NOT an advantage of ABC? Accurate product costing, Improved decision-making, Identification of cost drivers

Back

Reduced implementation complexity

Front

Overhead costs in ABC are assigned based on

Back

Activity consumption