Reference no: EM13600332

1.The allocation of indirect costs in an activity-based costing system

• may require other costs to be allocated to activities before the costs of the activities can be allocated to the products.
• is simplified because more costs are identified as direct costs.
• requires the use of heterogeneous cost pools.
• is simplified because a limited number of activities are identified as cost objects.

2.The MOST likely example of an output unit-level cost is

• general administrative costs.
• paying suppliers for orders received.
• engineering costs.
• machine depreciation.

3.Different products consume different proportions of manufacturing overhead costs because of differences in all of the following EXCEPT

• selling prices.
• customers' customization specifications.
• setup times.
• product design.

4.A PRIMARY reason for assigning selling and distribution costs to products for analytical purposes is

• to justify a product mix.
• that controllers are required to assign all costs when valuing inventories.
• that different processes, products, and customers require different quantities of selling and distribution activities.
• that all indirect costs must be assigned.

5.Products make diverse demands on resources because of differences in all of the following EXCEPT

• volume.
• selling price.
• batch size.
• complexity.

6.Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity?

• $0.50
• $1.00
• $1.50
• $2.00