50+ MCQ’s Emerging Concepts of Cost Accounting | (Free Resource)

41. A well-designed activity-based costing system starts with:
(a) identifying the activity-cost pools
(b) computing the activity-based overhead rate
(c) assigning manufacturing overhead costs for each activity cost pool to products
(d) analysing the activities performed to manufacture a product

42. Assigning overhead using ABC will usually
(a) decrease the cost per unit for low volume products as compared to a traditional overhead allocation
(b) increase the cost per unit for low volume products as compared to a traditional overhead allocation
(c) provide less accurate cost per unit for low volume products than will traditional costing
(d) result in the same cost per unit for low volume products as does traditional costing

43. The primary benefit of ABC is it provides
(a) better management decisions
(b) enhanced control over overhead costs
(c) more cost pools
(d) more accurate product costing

44. Which of the following is not a benefit of activity-based costing?
(a) More accurate product costing
(b) Enhanced control over overhead costs
(c) Better management decisions
(d) Less costly to use

45. Which of the following is a limitation of activity-based costing?
(a) More cost pools
(b) Less control over overhead costs
(c) ABC can be expensive to use
(d) Poorer management decisions

46. Which of the following is not a facility-level activity?
(a) Plant management
(b) Product design
(c) Personnel administration
(d) Training

47. Which of the following is not a product-level activity?
(a) Product design
(b) Engineering changes
(c) Inventory management
(d) Equipment setups

48. Which of the following is not a batch-level activity?
(a) Engineering changes
(b) Equipment setups
(c) Inspection
(d) Materials handling

49. Which of the following is not a unit-level activity?
(a) Purchase ordering
(b) Assembling
(c) Painting
(d) Sewing

50. Which of the following is not a facility-level activity?
(a) Plant depreciation
(b) Property taxes
(c) Engineering changes
(d) Utilities

Answer: 41)analysing the activities performed to manufacture a product 42)increase the cost per unit for low volume products as compared to a traditional overhead allocation 43)more accurate product costing 44)Less costly to use 45)ABC can be expensive to use 46)Product design 47)Equipment setups 48)Engineering changes 49)Purchase ordering 50)Engineering changes

51. Which of the following is not a product-level activity?
(a) Product design
(b) Engineering changes
(c) Material handling
(d) Inventory management

52. Which of the following is not a batch-level activity?
(a) Purchase ordering
(b) Equipment setups
(c) Inspection
(d) Assembling

53. Which of the following is not a unit-level activity?
(a) Drilling
(b) Cutting
(c) Sanding
(d) Inspecting

54. Which of the following is a unit-level activity?
(a) Painting
(b) Purchase ordering
(c) Inspection
(d) Material handling

55. Which of the following is a batch-level activity?
(a) Assembling
(b) Product design
(c) Engineering changes
(d) Purchase ordering

56. Which of the following is a product-level activity?
(a) Equipment setups
(b) Product design
(c) Property taxes
(d) Utilities

57. Which of the following is a facility-level activity?
(a) Engineering changes
(b) Product design
(c) Property taxes
(d) Inspection

58. Activities required to support or sustain an entire production process are called
(a) unit-level activities
(b) batch-level activities
(c) product-level activities
(d) facility-level activities

59. Cost allocation bases in activity-based costing should be
(a) cost drivers
(b) value-added activities
(c) activity centers
(d) processes

60. What is the purpose of ABC?
(a) To identify what product costs are incurred by a company
(b) To allocate and assign all product costs incurred to the appropriate products or services
(c) To determine a cost object for which cost information is needed
(d) To allocate and assign indirect costs
(e) To analyse the activities that cause cost pools to increase

Answer: 51)Material handling 52)Assembling 53)Inspecting 54)Painting 55)Purchase ordering 56)Product design 57)Property taxes 58)facility-level activities 59)cost drivers 60)To allocate and assign indirect costs