Posted: July 31st, 2016
1. Activity-based costing is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore “fixed” costs.
2. Batch-level activities are performed each time a batch of goods is handled or processed.
3. In activity-based costing, some costs may be broken down and assigned to two activity cost pools. For example, part of a supervisor’s salary may be classified as a product-level activity and part of it may be classified as a batch-level activity.
4. Which of the following would be an acceptable measure of activity for a material handling activity cost pool?
a. Yes – yes
b. No – yes
c. Yes – No
d. No – No
5. Providing the power required to run production equipment is an example of a:
a. Unit-level activity.
b. Batch-level activity.
c. Product-level activity.
d. Organization-sustaining activity.
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