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WorksheetsActivity-based Costing
Total questions: 10
Worksheet time: 13mins
Arrange the steps in ABC costing:
a) selecting the appropriate cost driver for each activity
b) compute ABC OH rate, and OH cost for each activity
c) assigning a cost to the cost centre
d) identify activities
(a)
Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?
Machine-hours
Direct labor-hours
Number of orders processed
Cost of materials purchased
Genius Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would probably be the most accurate measure of activity to use for allocating the costs of inspecting the finished products at Genius?
Number of inspections
Machine-hours
Direct labour hours
Inspection time
The labour time required to assemble a product is an example of a:
Unit-level activity
Batch-level activity
Product-level activity
Organization-sustaining activity
Production order processing is an example of a:
Unit-level activity
Batch-level activity
Product-level activity
Organization-sustaining activity
Designing a new product is an example of a:
Unit-level activity
Batch-level activity
Product-level activity
Organization-sustaining activity
The plant manager's salary is an example of a:
Unit-level activity
Batch-level activity
Product-level activity
Organization-sustaining activity
A transaction driver provides a simple count of the number of times that an activity occurs.
True
False
In activity-based costing, all manufacturing costs must be included in product costs.
True
False
Activity-based costing may supplement, rather than replace, a company's formal cost accounting system.
True
False
