K
C
LO
YC
D
U
ST
ACCT 212 CHAPTER 4: ACTIVITY-BASED
COSTING QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED
ANSWERS) ALREADY GRADED A+
, Activity-Based Costing (ABC) - ANS A two-stage costing method in which overhead costs are
assigned to products on the basis of the activities they require.
Activity - ANS An event that causes the consumption of overhead resources.
Activity Cost Pool - ANS A "bucket" in which costs are accumulated that relate to a single
activity measure in an activity-based costing system.
Activity Measure - ANS An allocation base in an activity-based costing system: ideally, a
measure of whatever causes the costs in an activity cost pool.
K
Activity Rate - ANS An overhead rate in activity-based costing. Each activity cost pool has its
own activity rate which is used to assign overhead to products and services.
C
Unit-Level Activities - ANS Activities that arise as a result of the total volume of goods and
services that are produced, and that are performed each time a unit is produced.
LO
Batch-Level Activities - ANS Activities that are performed each time a batch of goods is
handled or processed, regardless of how many units are in the batch. The amount of resource
consumed depends on the number of batches run rather than on the number of units in the
batch.
YC
Activity-Based Management - ANS A management approach that focuses on managing
activities as a way of eliminating waste and reducing delays and defects.
Benchmarking - ANS A systematic approach to identifying the activities with the greatest room
for improvement. It is based on comparing the performance in an organization with the
D
performance of other, similar organizations known for their outstanding performance.
Which of the following statements is false? (You may select more than one answer.)
U
a) In recent years, most companies have experienced increasing manufacturing overhead costs
in relation to direct labor costs.
ST
b) Batch-level costs do not depend on the number of units produced in a batch.
c) Facility-level costs are not caused by particular products.
d) Product-level costs are larger for high-volume products than for low-volume products. - ANS
D
Which of the following statements is true? (You may select more than one answer.)
a) The costs of a unit-level activity should be proportional to the number of units produced.
b) Unit-level activities are performed each time a unit is produced.
c) Setting up equipment is an example of a unit-level activity.
C
LO
YC
D
U
ST
ACCT 212 CHAPTER 4: ACTIVITY-BASED
COSTING QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED
ANSWERS) ALREADY GRADED A+
, Activity-Based Costing (ABC) - ANS A two-stage costing method in which overhead costs are
assigned to products on the basis of the activities they require.
Activity - ANS An event that causes the consumption of overhead resources.
Activity Cost Pool - ANS A "bucket" in which costs are accumulated that relate to a single
activity measure in an activity-based costing system.
Activity Measure - ANS An allocation base in an activity-based costing system: ideally, a
measure of whatever causes the costs in an activity cost pool.
K
Activity Rate - ANS An overhead rate in activity-based costing. Each activity cost pool has its
own activity rate which is used to assign overhead to products and services.
C
Unit-Level Activities - ANS Activities that arise as a result of the total volume of goods and
services that are produced, and that are performed each time a unit is produced.
LO
Batch-Level Activities - ANS Activities that are performed each time a batch of goods is
handled or processed, regardless of how many units are in the batch. The amount of resource
consumed depends on the number of batches run rather than on the number of units in the
batch.
YC
Activity-Based Management - ANS A management approach that focuses on managing
activities as a way of eliminating waste and reducing delays and defects.
Benchmarking - ANS A systematic approach to identifying the activities with the greatest room
for improvement. It is based on comparing the performance in an organization with the
D
performance of other, similar organizations known for their outstanding performance.
Which of the following statements is false? (You may select more than one answer.)
U
a) In recent years, most companies have experienced increasing manufacturing overhead costs
in relation to direct labor costs.
ST
b) Batch-level costs do not depend on the number of units produced in a batch.
c) Facility-level costs are not caused by particular products.
d) Product-level costs are larger for high-volume products than for low-volume products. - ANS
D
Which of the following statements is true? (You may select more than one answer.)
a) The costs of a unit-level activity should be proportional to the number of units produced.
b) Unit-level activities are performed each time a unit is produced.
c) Setting up equipment is an example of a unit-level activity.
