Test 2 Managerial accounting Verified Exam Questions and Answers
Latest update 2026/2027
Question:
Which costing method assumes all products use overhead costs in the same proportions?
Answer:
Plantwide overhead rate method
Question:
Which of the following would usually not be used in computing plantwide overhead rates?
Answer:
Number of quality inspections
Question:
With ABC, overhead costs should be traced to which cost object first?
Answer:
Activities
Question:
Activity-based costing
Answer:
Uses more than one rate to allocate overhead costs to products.
-Typically uses the most overhead allocation rates.
-Focuses on the costs of carrying out activities.
Question:
Plantwide overhead rate method
Answer:
Uses only volume-based measures such as direct labor hours to allocate overhead costs to products.
Question:
Departmental overhead rate method
Answer:
Uses more than one rate to allocate overhead costs to products.
-Uses only volume-based measures such as direct labor hours to allocate overhead costs to
products. A manufacturer uses machine hours to assign overhead costs to products. Budgeted
information for the next year follows. Budgeted factory overhead costs $544,000 Budgeted machine
hours 6,400
, Question:
Compute the plantwide overhead rate for the next year based on machine hours.
Answer:
544,000/6400=85
Question:
Activity
Answer:
A task that causes a cost to be incurred.
Question:
Activity driver
Answer:
Measurement associated with an activity.
Question:
Cost object
Answer:
Anything to which costs will be assigned.
Question:
Cost pool
Answer:
A group of costs that have the same activity drivers.
Question:
If management wants the most accurate product cost, which of the following costing methods should
be used?
Answer:
Activity-based costing.
Question:
Which costing method tends to overstate the cost of high-volume products
Answer:
Traditional volume-based costing.
Latest update 2026/2027
Question:
Which costing method assumes all products use overhead costs in the same proportions?
Answer:
Plantwide overhead rate method
Question:
Which of the following would usually not be used in computing plantwide overhead rates?
Answer:
Number of quality inspections
Question:
With ABC, overhead costs should be traced to which cost object first?
Answer:
Activities
Question:
Activity-based costing
Answer:
Uses more than one rate to allocate overhead costs to products.
-Typically uses the most overhead allocation rates.
-Focuses on the costs of carrying out activities.
Question:
Plantwide overhead rate method
Answer:
Uses only volume-based measures such as direct labor hours to allocate overhead costs to products.
Question:
Departmental overhead rate method
Answer:
Uses more than one rate to allocate overhead costs to products.
-Uses only volume-based measures such as direct labor hours to allocate overhead costs to
products. A manufacturer uses machine hours to assign overhead costs to products. Budgeted
information for the next year follows. Budgeted factory overhead costs $544,000 Budgeted machine
hours 6,400
, Question:
Compute the plantwide overhead rate for the next year based on machine hours.
Answer:
544,000/6400=85
Question:
Activity
Answer:
A task that causes a cost to be incurred.
Question:
Activity driver
Answer:
Measurement associated with an activity.
Question:
Cost object
Answer:
Anything to which costs will be assigned.
Question:
Cost pool
Answer:
A group of costs that have the same activity drivers.
Question:
If management wants the most accurate product cost, which of the following costing methods should
be used?
Answer:
Activity-based costing.
Question:
Which costing method tends to overstate the cost of high-volume products
Answer:
Traditional volume-based costing.
