DEVRY ACCT434 WEEK 1QUIZ
Question 1. 1. (TCO 1) Production-cost cross-subsidization results from (Points : 3)
allocating indirect costs to multiple products.
assigning traced costs to each product.
assigning costs to different products using varied costing systems within the same organization.
assigning broadly averaged costs across multiple products without recognizing amounts of resources used by which products.
Question 1. 1. (TCO 1) Production-cost cross-subsidization results from (Points : 3)
allocating indirect costs to multiple products.
Question 2. 2. (TCO 1) Building or plant security is an example of (Points : 3)
unit-level costs.
batch-level costs.
product-sustaining costs.
facility-sustaining costs.
Question 3. 3. (TCO 1) Evaluating customer reaction of the trade-off of giving up some features of a product for a lower price would best fit which category of management decisions under activity-based management? (Points : 3)
Pricing and product-mix decisions
Cost reduction decisions
Design decisions
Discretionary decisions
Question 4. 4. (TCO 1) Overcosting of a product is MOST likely to result from (Points : 3)
misallocating direct labor costs
overpricing the product
undercosting another product.
understating total product costs
Question 5. 5. (TCO 1) The MOST likely example of a batch-level cost is (Points : 3)
utility costs
machine repairs.
product-designing costs.
setup costs.
Question 6. 6. (TCO 1) Which method of allocation probably best estimates actual overhead costs used? Why? (Points : 3)
Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
Single direct labor-hours cost driver because it is easiest to analyze and interpret.
Three activity-cost drivers because they best reflect the relative consumption of resources.
Three activity-cost drivers because product costs can be significantly cross-subsidized.
Question 7. 7. (TCO 1) Activity-based management (ABM) includes decisions about all EXCEPT (Points : 3)
pricing and product mix.
smoothing costs.
reducing costs.
improving processes
Question 8. 8. (TCO 1) Activity-based costing information (Points : 3)
should be used when services place similar demands on resources
usually results in peanut-butter costing
will yield inaccurate cost numbers when products are similar
may assist in improving product design and efficiency.
Question 9. 9. (TCO 1) Products make diverse demands on resources because of differences in all of the following EXCEPT (Points : 3)
volume
selling price.
batch size.
complexity
Question 10. 10. (TCO 1) Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity? (Points : 3)
$0.50
$1.00
$1.50
$2.00
Offcanvas menu