4758476
Description
Quiz by Andrew Knifer, updated more than 1 year ago
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Created by Andrew Knifer
over 8 years ago
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Question 1
Question
A well-designed, activity-based cost system helps managers make better decisions because information derived from an ABC analysis ________.
Answer
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can be used to eliminate nonvalue-added activities
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is easy to analyze and interpret
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takes the choices and judgment challenges away from the managers
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emphasizes how managers can achieve higher sales
Question 2
Question
The unique feature of an ABC system is the emphasis on ________.
Answer
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costing individual jobs
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department indirect-cost rates
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multiple-cost pools
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individual activities
Question 3
Question
Which of the following is a sign that an ABC system may be useful for an organization?
Answer
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Significant amounts of indirect costs are allocated using multiple cost pools.
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Products make similar demands on resources because of similarities in volume, process steps, batch size, or complexity.
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Many indirect costs are described as batch-level costs, product-sustaining costs, or facility-sustaining costs.
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Operations staff disagrees with accountants about the costs of manufacturing and marketing products and services.
Question 4
Question
It only makes sense to implement an ABC system when ________.
Answer
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a single product is produced in bulk
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its benefits exceed its implementation costs
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it traces more costs as direct costs
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production process is labor-intensive
Question 5
Question
Product-cost cross-subsidization ________.
Answer
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exists when one overcosted product results in more than one other product being overcosted
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means that if a company undercosts more than one of its products, it will overcost more than one of its other products
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means that if a company undercosts one of its products, it will overcost at least one of its other products
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exists only when one overcosted product results in all other products being overcosted
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