Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 5, Problem 5.17MCQ
To determine
Activity based costing:
Activity based costing is stand for the ABC. It is that method in which organization identifies the activities and assign the cost to each resource according to use of them.
To identify: The correct option.
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Students have asked these similar questions
Which of the following statements is true of activity-based costing?
O a.
ABC ignores the allocation of storage costs.
O b. Activities are the cost objects of the second stage of ABC.
Ос.
An activity cost pool collects costs related to the same activity.
O d. ABC is more likely to result in big differences from a traditional costing system if the business
makes only one product rather than multiple products.
Which of the following statements is true of activity-based costing?
O a. Activities are the cost objects of the second stage of ABC.
O b. ABC ignores the allocation of storage costs.
O c. ABC is more likely to result in big differences from a traditional costing system if the business
makes only one product rather than multiple products.
O d. An activity cost pool collects costs related to the same activity.
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Which of the following factors is NOT considered to have influenced the development of activity-based costing?
a. Increase in direct costs as a proportion of total product costs.
b. Increase in overhead costs as a proportion of total product costs.
c. Availability of sophisticated accounting software that provides accurate and detailed cost information on a timely basis.
d. Diversity of products with a mix of high and low volume products.
Chapter 5 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 5 - What is broad averaging, and what consequences can...Ch. 5 - Why should managers worry about product...Ch. 5 - What is costing system refinement? Describe three...Ch. 5 - What is an activity-based approach to designing a...Ch. 5 - Describe four levels of a cost hierarchy.Ch. 5 - Why is it important to classify costs into a cost...Ch. 5 - What are the key reasons for product cost...Ch. 5 - Prob. 5.8QCh. 5 - Department indirect-cost rates are never...Ch. 5 - Prob. 5.10Q
Ch. 5 - Prob. 5.11QCh. 5 - Prob. 5.12QCh. 5 - Activity-based costing is the wave of the present...Ch. 5 - Increasing the number of indirect-cost pools is...Ch. 5 - The controller of a retail company has just had a...Ch. 5 - Conroe Company is reviewing the data provided by...Ch. 5 - Prob. 5.17MCQCh. 5 - Cost hierarchy. Roberta, Inc., manufactures...Ch. 5 - ABC, cost hierarchy, service. (CMA, adapted)...Ch. 5 - Alternative allocation bases for a professional...Ch. 5 - Plant-wide, department, and ABC Indirect cost...Ch. 5 - Plant-wide, department, and activity-cost rates....Ch. 5 - ABC, process costing. Sander Company produces...Ch. 5 - Department costing, service company. DLN is an...Ch. 5 - Activity-based costing, service company....Ch. 5 - Activity-based costing, manufacturing. Decorative...Ch. 5 - ABC, retail product-line profitability. Fitzgerald...Ch. 5 - Prob. 5.28ECh. 5 - Activity-based costing. The job-costing system at...Ch. 5 - ABC, product costing at banks,...Ch. 5 - Problems 5-31 Job costing with single direct-cost...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - Job costing with multiple direct-cost categories,...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - First-stage allocation, time-driven activity-based...Ch. 5 - Department and activity-cost rates, service...Ch. 5 - Activity-based costing, merchandising. Pharmahelp,...Ch. 5 - Choosing cost drivers, activity-based costing,...Ch. 5 - ABC, health care. Crosstown Health Center runs two...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - Unused capacity, activity-based costing,...Ch. 5 - ABC, implementation, ethics. (CMA, adapted) Plum...Ch. 5 - Activity-based costing, activity-based management,...
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Similar questions
- Which of the following is a reason a company would implement activity-based costing? A. The cost of record keeping is high. B. The additional data obtained through traditional allocation are not worth the cost. C. They want to improve the data on which decisions are made. D. A company only has one cost driver.arrow_forwardWhen might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?arrow_forwardExplain how a plantwide overhead rate, using a unit-based driver, can produce distorted product costs. In your answer, identify two major factors that impair the ability of plantwide rates to assign cost accurately.arrow_forward
- Why are support department costs difficult to apply to products?arrow_forwardWhich 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 productarrow_forwardWhich statement is correct? A. Activity-based cost systems are less costly than traditional cost systems. B. Activity-based cost systems are easier to implement than traditional cost systems. C. Activity-based cost systems are more accurate than traditional cost systems. D. Activity-based cost systems provide the same data as traditional cost systems.arrow_forward
- The second stage of customer-based activity-based costing entails the assignment of: a. resource costs to sales departments. b. resources costs to distribution channels. c. customer-related activity costs to products. d. customer-related activity costs to customers.arrow_forwardWhich 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 overheadarrow_forwardStandard costs are used in companies for a variety of reasons. Which of the following is a benefit of using standard costs? a. They are used to estimate the cost of inventory. b. They are used to control costs. c. They are used to plan direct materials, direct labor, and variable factory overhead. d. all of these choicesarrow_forward
- The main categories of income statement for a manufacturer includes the following, except a. Direct Labor b. Indirect manufacturing c. Direct materials d. Indirect labor Cost allocation assigns indirect costs to cost objects. Select one: True False Technology influences manager’s role on cost behavior. Select one: True False ABC system determines the following key components, except: a. Resources b. Key activities c. Cost objectives d. Raw materials Each decision of value chain does not influence organization performance. Select one: True False Companies adopt ABC system for the following benefits, except: a. Decrease cost related to bad decisions b. Identify changes in the employee productivity c. Keep pace with technological changes d. Take cost reduction advantages.arrow_forward4. S1: In activity-based costing, all manufacturing costs must be included in product costs. S2: The first-stage allocation in activity-based costing is the process by which overhead costs are assigned to activity cost pools. Both statements are correct. Only S1 is correct. Only S2 is correct. Both statements are incorrect. 5. [S1] Traditional management involves focusing on the resources and capabilities of the firm to minimize costs and maximize production. [S2] Modern strategic management concepts focus more on changes in the external environment and how business entities can adapt to these changes. Both statements are correct. Both statements are incorrect. Only S1 is correct. Only S2 is correct. 6. There is a high level of turnover among the sales representatives of the firm. Which of the following would be appropriate for this concern? Consult with the human resource department and review hiring qualifications, interview questions and applicant values trend. Analyze service…arrow_forwardFirst: Activity-based management seeks to eliminate waste by allocating costs to products that waste resources. Second: In activity-based costing, nonmanufacturing costs as well as manufacturing costs may be assigned to products. a. Only the first statement is true b. Only the second statement is true c. Both statements are true d. Both statements are falsearrow_forward
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