ACC 241 EXAM 2 ASU DALLMUS
QUESTIONS AND ANSWERS 2026
- 2027
What are the four categories of activity costs in the cost hierarchy? -
ANSWERS-1: Unit-Level Activities
2: Batch-Level Activities
3: Product-Level Activities
4: Facility-Level Activities
What are Unit-Level Activities? - ANSWERS--Activities and costs
incurred for every unit-Ex: Inspecting/packaging each unit the
company produces
What are Batch-Level Activities? - ANSWERS--Activities/costs
incurred for every batch, regardless of the number of units in the
batch-Ex: Machine Setup --> Once the machines are set up to be used
in production, the company could produce a batch of 1, 10, or 100
units, while still only incurring the machine setup cost once for the
entire batch
What are Product-Level Activities? - ANSWERS--Activities and costs
incurred for a particular product, regardless of the number of units or
batches of the product produced-Ex: The cost to research, develop,
design, and market new models
, What are Facility-Level Activities? - ANSWERS--Activities and costs
incurred no matter how many units, batches, or products are produced
in the plant-Ex: Facility upkeep --> The cost of depreciation,
insurance, property tax, and maintenance on the entire production
plant
activity based management - ANSWERS-a management approach
that focuses on managing activities as a way of eliminating waste and
reducing delays and defects
-refers to the use of activity-based cost information to make decisions
that increase profits while satisfying customer needs
What are value-added activities? - ANSWERS-Activities for which
the customer is willing to pay because these activities add value to the
final product
What are non-value-added activities? - ANSWERS-Activities that
neither enhance the customer's image of the product nor provide a
competitive advantage
Benefits of adopting activity-based costing - ANSWERS-- significant
amounts of indirect costs are allocated using only one or two cost
pools.
- all or most indirect costs are identified as output unit-level costs.
- products make diverse demands on resources because of differences
in volume, process steps, batch size, or complexity
QUESTIONS AND ANSWERS 2026
- 2027
What are the four categories of activity costs in the cost hierarchy? -
ANSWERS-1: Unit-Level Activities
2: Batch-Level Activities
3: Product-Level Activities
4: Facility-Level Activities
What are Unit-Level Activities? - ANSWERS--Activities and costs
incurred for every unit-Ex: Inspecting/packaging each unit the
company produces
What are Batch-Level Activities? - ANSWERS--Activities/costs
incurred for every batch, regardless of the number of units in the
batch-Ex: Machine Setup --> Once the machines are set up to be used
in production, the company could produce a batch of 1, 10, or 100
units, while still only incurring the machine setup cost once for the
entire batch
What are Product-Level Activities? - ANSWERS--Activities and costs
incurred for a particular product, regardless of the number of units or
batches of the product produced-Ex: The cost to research, develop,
design, and market new models
, What are Facility-Level Activities? - ANSWERS--Activities and costs
incurred no matter how many units, batches, or products are produced
in the plant-Ex: Facility upkeep --> The cost of depreciation,
insurance, property tax, and maintenance on the entire production
plant
activity based management - ANSWERS-a management approach
that focuses on managing activities as a way of eliminating waste and
reducing delays and defects
-refers to the use of activity-based cost information to make decisions
that increase profits while satisfying customer needs
What are value-added activities? - ANSWERS-Activities for which
the customer is willing to pay because these activities add value to the
final product
What are non-value-added activities? - ANSWERS-Activities that
neither enhance the customer's image of the product nor provide a
competitive advantage
Benefits of adopting activity-based costing - ANSWERS-- significant
amounts of indirect costs are allocated using only one or two cost
pools.
- all or most indirect costs are identified as output unit-level costs.
- products make diverse demands on resources because of differences
in volume, process steps, batch size, or complexity
