50+ MCQ’s Emerging Concepts of Cost Accounting | (Free Resource)
21. All of the following are considered to be part of the activity levels often used to implement ABC, with the exception of
(a) production-level activity
(b) batch-level activity
(c) product-level activity
(d) unit-level activity
22. Which of the following systems focuses on activities as the fundamental cost objects and uses the costs of those activities for compiling the indirect costs of products?
(a) Job costing
(b) Activity-based costing
(c) Process costing
(d) Product costing
23. Regarding activity-based costing systems, which of the following statements is true?
(a) ABC systems accumulate overhead costs by departments.
(b) ABC costing systems are less complex and, therefore, less costly than traditional systems.
(c) ABC costing systems have separate indirect cost allocation rates for each activity.
(d) ABC costing systems can be used in manufacturing firms only.
24. Examples of activities at the batch level of costs include:
(a) cutting, painting, and packaging
(b) material ordering, machine set up, and inspection
(c) designing, part-specification, and advertising
(d) heating, lighting, and security
(e) none of the above
25. Examples of activities at the product level of costs include:
(a) cutting, painting, and packaging
(b) material ordering, machine set up, and inspection
(c) designing, part-specification, and advertising
(d) heating, lighting, and security
(e) none of the above
26. Which of the following is typically regarded as a cost driver in traditional accounting practices?
(a) Number of purchase orders processed
(b) Number of customers served
(c) Number of transactions processed
(d) Number of direct labour hours worked
27. The term cost driver refers to
(a) any activity that can be used to predict cost changes
(b) the attempt to control expenditures at a reasonable level
(c) the person who gathers and delivers cost data to the management accountant
(d) any activity that causes costs to be incurred
28. Cost allocation bases in activity-based costing should be
(a) Cost drivers
(b) Cost pools
(c) Activity centers
(d) Resources
29. Costs that are common to many different activities within an organization are known as _______ costs.
(a) Product-level
(b) Facility-level
(c) Batch-level
(d) Unit-level
30. Relative to traditional product costing, activity-based costing differs in the way costs are
(a) processed
(b) allocated
(c) benchmarked
(d) incurred
| Answer: 21)production-level activity 22)Activity-based costing 23)ABC costing systems have separate indirect cost allocation rates for each activity. 24)material ordering, machine set up, and inspection 25)designing, part-specification, and advertising 26)Number of direct labour hours worked 27)any activity that causes costs to be incurred 28)Cost drivers 29)Facility-level 30)allocated |
