Traditional Volume-based costing allocates indirect product costs based on the volume of output, using such allocation bases as direct labor hours, machine production process. Activity-based costing (ABC) has consistently shown that volume-based costing. the cost of low-volume products and the Select one: O a. Overstates, Understates O b. Understates, Understates O c Understates, Overstates O d. Overstates, Overstates O e. none of the given answer.

Traditional Volume-based costing allocates indirect product costs based on the volume of output, using such allocation bases as direct labor hours, machine production process. Activity-based costing (ABC) has consistently shown that volume-based costing. the cost of low-volume products and the Select one: O a. Overstates, Understates O b. Understates, Understates O c Understates, Overstates O d. Overstates, Overstates O e. none of the given answer.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 9MC: Which is not a step In activity-based costing? A. identify the activities performed by the...

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Happy Trails has this information for its manufacturing: Â Its income statement under absorption costing is: Prepare an income statement with variable costing and a reconciliation statement between both methods.
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
Trail Outfitters has this information for its manufacturing: Its income statement under absorption costing is as follows: Prepare an income statement with variable costing and a reconciliation statement between both methods.
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
Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling price
Under variable costing, a unit of product includes which costs? direct material, direct labor, and manufacturing overhead Direct material, direct labor, and variable manufacturing overhead Direct material, direct labor, and fixed manufacturing overhead D. Direct material, direct labor, and all variable manufacturing overhead
Activity-based costing is preferable in a system: when multiple products have similar product volumes and costs with a large direct labor cost as a percentage of the total product cost with multiple, diverse products where management needs to support an increase in sales price
When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products?
Which of the following product situations is better suited to job order costing than to process costing? A. Each product batch is exactly the same as the prior batch. B. The costs are easily traced to a specific product. C. Costs are accumulated by department. D. The value of work in process is based on assigning standard costs.
Job-order costing works well whenever a. homogeneous products pass through a series of processes and receive similar doses of conversion inputs and different doses of material inputs. b. homogeneous products pass through a series of processes and receive similar doses of materials, labor, and overhead. c. heterogeneous products pass through a series of processes and receive different doses of materials, labor, and overhead. d. material cost is accumulated by process and conversion cost is accumulated by process.
Explain 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.
In the variable costing income statement, how are the fixed manufacturing costs reported, and how are the fixed selling and administrative expenses reported?