Post_test

Activity based costing system differs from traditional costing systems in the treatment of _____.

• Direct labor costs

• Direct material costs

• Prime costs

• Indirect costs

The fundamental cost objects of ABC are ____.

• Activities

• Cost drivers

• Products

• Services

_______ is an example of an output unit-level cost in the cost hierarchy.

• Factory rent expense

• Building security costs

• Top management compensation costs

• Machine depreciation

For a company which produce its products in batches, the CEO’s salary is a(n) _____ cost.

• Batch-level

• Output unit-level

• Facility-sustaining

• Product-sustaining

Top management compensation cost is an example of _____ in the cost hierarchy.

• Unit-level costs

• Batch-level costs

• Product-sustaining costs

• Facility-sustaining costs

_______ costs support the organization as a whole.

• Unit-level

• Batch-level

• Facility-sustaining

• Product-sustaining

_______ is considered while choosing a cost allocation base for activity costs in ABC costing.

• Marketing strategy and material price level

• Availability of reliable data and measures

• Product price level

• Market share of a product

Which of the following cost and cost allocation base have a strong cause and effect relationship?

• Administration costs and cubic feet

• Setup costs and square feet

• Quality control costs and the number of inspections

• Machine maintenance and setup hours

The reduction in cost per unit of wooden chess pieces under ABC system is due to difference in allocation of _____.

• Labor costs

• Prime costs

• Indirect costs

• Material costs

The goal of a properly constructed ABC system is to ______.

• Have the most accurate cost system

• Identify more indirect costs

• Develop the best cost system that meets the cost/benefit test

• Have separate allocation rates for each department