KU ACCOUNTING 201 EXAM 4 STUDY GUIDE 2026/2027 |
ACCOUNTING PRACTICE QUESTIONS AND ANSWERS
Unit-level activity - Correct answer✅✅ Activity performed for each individual unit
ex: drilling holes in wings
Batch-level activity - Correct answer✅✅ Activity performed once for a group of products, regardless of
the # of units in the batch
ex: crane set up
Product-level activity - Correct answer✅✅ Activity performed once for the entire product line,
regardless of the # of units in the batch
ex: product design
Customer-level activity - Correct answer✅✅ Activity performed for a specific customer. Doing
something for 1 customer and not for another
ex: designing the paint template for the logo
Organization-level activity - Correct answer✅✅ Activity performed to keep the business running to
manufacture the product
ex: rent, paint insurance
A water bottle company embosses the company's logo on every product made. what activity level does
this fall under? - Correct answer✅✅ Unit-level activity
Activity cost pool rates equation: - Correct answer✅✅ Total cost($) of activity pool/
total volume of cost driver
Allocating costs to products and services equation: - Correct answer✅✅ Actual use of cost driver X
activity pool rate
, Unit product costs equation: - Correct answer✅✅ Actual use of cost driver/
units produced
=MOH cost per unit
Total cost per unit equation: - Correct answer✅✅ MOH + DM + DL
2 ways you can identify non-value-added costs? - Correct answer✅✅ 1. Is the activity necessary to the
production process?
2. Is the activity efficiently performed?
3 common non-value-added costs for a manufacturing company? - Correct answer✅✅ 1. Storage &
handling
2. Inspecting the product
3. Testing
If Activity-Based Costing(ABC) is so great, why doesn't everyone use it? - Correct answer✅✅ Because
it is costly to implement(new software, training employees, etc). It is timely and expensive.
What information do managers need to make good decisions? - Correct answer✅✅ 1. Relevant
-Pertain to the future
-Differs between alternatives
2. Accurate info
3. Timely
Are avoidable costs relevant of irrelevant? - Correct answer✅✅ Relevant, they can be eliminated.
Are sunk costs relevant of irrelevant? - Correct answer✅✅ Irrelevant, because the occurred in the past
and you can not change it. Unavoidable= irrelevant
ACCOUNTING PRACTICE QUESTIONS AND ANSWERS
Unit-level activity - Correct answer✅✅ Activity performed for each individual unit
ex: drilling holes in wings
Batch-level activity - Correct answer✅✅ Activity performed once for a group of products, regardless of
the # of units in the batch
ex: crane set up
Product-level activity - Correct answer✅✅ Activity performed once for the entire product line,
regardless of the # of units in the batch
ex: product design
Customer-level activity - Correct answer✅✅ Activity performed for a specific customer. Doing
something for 1 customer and not for another
ex: designing the paint template for the logo
Organization-level activity - Correct answer✅✅ Activity performed to keep the business running to
manufacture the product
ex: rent, paint insurance
A water bottle company embosses the company's logo on every product made. what activity level does
this fall under? - Correct answer✅✅ Unit-level activity
Activity cost pool rates equation: - Correct answer✅✅ Total cost($) of activity pool/
total volume of cost driver
Allocating costs to products and services equation: - Correct answer✅✅ Actual use of cost driver X
activity pool rate
, Unit product costs equation: - Correct answer✅✅ Actual use of cost driver/
units produced
=MOH cost per unit
Total cost per unit equation: - Correct answer✅✅ MOH + DM + DL
2 ways you can identify non-value-added costs? - Correct answer✅✅ 1. Is the activity necessary to the
production process?
2. Is the activity efficiently performed?
3 common non-value-added costs for a manufacturing company? - Correct answer✅✅ 1. Storage &
handling
2. Inspecting the product
3. Testing
If Activity-Based Costing(ABC) is so great, why doesn't everyone use it? - Correct answer✅✅ Because
it is costly to implement(new software, training employees, etc). It is timely and expensive.
What information do managers need to make good decisions? - Correct answer✅✅ 1. Relevant
-Pertain to the future
-Differs between alternatives
2. Accurate info
3. Timely
Are avoidable costs relevant of irrelevant? - Correct answer✅✅ Relevant, they can be eliminated.
Are sunk costs relevant of irrelevant? - Correct answer✅✅ Irrelevant, because the occurred in the past
and you can not change it. Unavoidable= irrelevant
