The following statements are correct except? A. ABC eliminates issues of over or under absorption B. CDR is calculated as total cost pool of the activity cost center divided by total cost driver of the activity C. ABC method and traditional method are used to apportion overhead cost D. ABC method is a replacement for a company’s usual traditional method

The following statements are correct except? A. ABC eliminates issues of over or under absorption B. CDR is calculated as total cost pool of the activity cost center divided by total cost driver of the activity C. ABC method and traditional method are used to apportion overhead cost D. ABC method is a replacement for a company’s usual traditional method

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3MC: Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B....

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Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overhead
Under absorption costing, a unit of product includes which costs? A. direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead
Which is not a step In activity-based costing? A. identify the activities performed by the organization B. identify the cost driver(s) associated with each activity C. compute a cost rate per production D. assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product
Under-allocated manufacturing overhead costs are always the result of which of the following situations? Select one: A. Estimated overhead costs are greater than actual overhead costs. B. Applied overhead costs are less than actual overhead costs. C. Actual overhead costs are greater than estimated overhead costs. D. Actual overhead costs are less than applied overhead costs.
Which of the following statements is true regarding the formula Y = a + bx? Multiple Choice Y = The estimated total fixed manufacturing overhead cost. Y = The estimated total amount of the allocation base. Y = The estimated total manufacturing overhead cost. Y = The actual total amount of the allocation base.
Which of the following statements regarding activity-based costing (ABC) is NOT correct? a. Under ABC cost centres are replaced by cost pools b. Blanket overhead recovery rates (OAR) are replaced with cost driver rates c. ABC uses one common overhead recovery rate, such as labour hours. d. ABC tackles the problems of absorption costing by adopting a much more accurate way of charging overhead to cost units.
Indicate whether the following statement is true or false, then support your view. By using a single cost pool and a single cost driver to allocate overhead, the more traditional methods of overhead assignment fully considers the influence on cost of the different activities that occur to make a product.
Which of the following statement is false? Multiple Choice Fixed manufacturing overhead is treated as a product cost under absorption costing method. Variable costing method is more useful than absorption costing approach in internal and managerial decision-making. The absorption costing approach is used in external financial reporting. The contribution margin income statement format separates costs according to cost behaviour. Fixed manufacturing overhead is treated as a period cost under absorption costing method.
Under-applied manufacturing overhead costs are always the result of which of the following situations? O a. Actual overhead costs are greater than estimated overhead costs. of O b. Applied overhead costs are less than actual overhead costs. stion O c. Estimated overhead costs are greater than actual overhead costs. O d. Actual overhead costs are less than applied overhead costs.
:Under activity-based costing, the process of assigning costs to cost objects is called First stage allocation .a O Calculation of cost object margin .b O None of the given answers .c O Third stage allocation .d O Second stage allocation .e O
Which is not a step in analyzing the cost driver for manufacturing overhead?A. identify the costB. identify non-value-added costsC. analyze the effect on manufacturing overheadD. identify the correlation between the potential driver and manufacturing overhead
All the following can be used as an allocation base, EXCEPT: O a. direct labor cost b. All the given answers can be used. O C. direct machine hours O d. units of output if the company has a single product e. direct labor hours