A) In activity-based costing, straight labor-hours is constantly the finest allocation base to allocate all non-manufacturing indirect costs.
B) task based costing is more suited to service providers with high product diversity than carriers with single product line.
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C) task based costing broadly averages or spreads the expense of sources uniformly to cost objects such as assets or services.
D) The main benefit of activity-based costing over peanut-butter costing is the accurate distribution of all direct expenses to the products.
5) A single indirect-cost rate distort product costs since ________.
A) over there is an assumption that every support activities affect all assets
B) that recognizes particular activities the are required to develop a product
C) compete pricing is ignored
D) that assumes all expenses are product costs
6) Extracts from cost information the Hebar Corp.:
Simple L3 Pack
Complex L7 Pack
Setup expense allocated using straight labor-hours
Setup expense allocated using setup-hours
Which that the following statement is true of Hebar's setup costs under classic costing?
A) L3 fill is undercosted by $5,550
B) L7 pack is undercosted by $5,450
C) L3 pack is overcosted by $5,550
D) L7 load is overcosted by $5,550
7) i beg your pardon of the following statements is true the activity-based costing?
A) Activity-based costing ignores the allocation the marketing and also distribution costs.
B) Activity-based costing is an ext likely to an outcome in significant differences from classic costing solution if the certain manufactures just one product quite than lot of products.
C) Activity-based costing classifies some of the indirect prices as direct costs.
D) chances of product-cost cross-subsidization are higher in activity-based costing contrasted to classic costing systems.
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8) Activity-based costing (ABC) deserve to eliminate expense distortions because ABC solution ________.
A) create a cause-and-effect partnership with the tasks performed
B) use single cost swimming pool for all overhead costs, thereby allowing simplicity
C) usage a vast average to allocate all overhead costs
D) never think about interactions in between different department in assigning assistance costs
9) Product present that produce different sports (models, styles, or colors) often require dedicated manufacturing tasks that interpret into ________.
A) under indirect expenses for each product heat
B) decision to drop product sport
C) a greater variety of direct manufacturing labor cost allocation rates
D) better overhead prices for each product line
Premium agency provides the adhering to ABC costing information:
ActivitiesTotal CostsActivity-cost drivers
Account inquiry $200,000 10,000 hours
Account billing $140,000 4,000,000 lines
Account verification accounts $75,000 40,000 accounts
Correspondence letters $ 25,000 4,000 letters
Total costs $440,000
The above activities are used by department A and B together follows:
Department ADepartment B
Account inspection hours 2,500 hours 4,000hours
Account billing lines 400,000 lines 250,000lines
Account verification accounts 10,000 accounts 8,000accounts
Correspondence letters 1,200 letters 1,600letters