Who of the following is an activity-based pricing limitation? Each important action accumulates costs. An activity cost pool contains all expenses associated with a specific activity. The premise behind activity-based costing is that each cost pool's cost is directly related to its cost measure. A wide range of activity measurements are employed.

Who of the following is an activity-based pricing limitation? Each important action accumulates costs. An activity cost pool contains all expenses associated with a specific activity. The premise behind activity-based costing is that each cost pool's cost is directly related to its cost measure. A wide range of activity measurements are employed.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 12MC: Which statement is correct? A. Activity-based cost systems are less costly than traditional cost...

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Which 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.
Activity-based management includes both process value analysis and activity-based costing. Which of the following features is primarily associated with process value analysis? a. Defining root causes of each activity b. Identifying cost objects and activity drivers c. Calculating activity rate d. Assigning costs to cost objects
For the following activities and their associated resources, identify the following: (1) a cost driver, (2) flexible resources, and (3) committed resources. Also, label each resource as one of the following with respect to the cost driver: (a) variable and (b) fixed.
What advantage does the FIFO cost method have over the average cost method relative to providing information for cost control?
When is an activity-based costing system better than a traditional allocation system?
In an activity-based costing system, the first step in assigning costs is to • A. separate nonvalue-adding activities from value-adding activities. B. identify the appropriate activities for each function. • C. analyze all nonvalue-adding activities to determine if they are necessary support areas. D. accumulate costs for each activity.
In a two-stage activity-based costing model, stage one involves Select one: O O A. assigning activity costs to cost objects. B. assigning indirect resource costs to activity pools. C. measuring the various indirect resource costs and determining resource drivers. D. assigning direct costs to cost objects.
Which of the following statements about ABC is not correct? answer choices When forming activity cost pools, the goal is to create as few cost pools as possible, while still capturing major activities. Activity-based costing classifies activities into two categories—either unit-level activities or facility level activities. An activity cost driver should ideally have a cause-and-effect relationship with the underlying activity. To compute an activity rate, divide the total activity cost by the total activity driver.
Which of the following is a correct statement? Check only those that are correct. Choose All That Apply Cost tracing is when a cost is attributed directly to a cost object.Cost tracing is when a cost is attributed directly to a cost object. Cost accumulation is the process of gathering cost information about each cost object.Cost accumulation is the process of gathering cost information about each cost object. Cost allocation is when a cost is applied or assigned to a cost object based on a certain factor.Cost allocation is when a cost is applied or assigned to a cost object based on a certain factor. Cost object is anything for which you are trying to gather (accumulate) cost information.
The allocation of indirect costs in an activity-based costing system a. may require other costs to be allocated to activities before the costs of the activities can be allocated to the products. b. is simplified because more costs are identified as direct costs. c. requires the use of heterogeneous cost pools. d. is simplified because a limited number of activities are identified as cost objects.
Under activity -based costing , second stage allocation would involve a. Calculating activity rates b. Assigning costs to cost objects c. Defining activity measures d. None of the given answers e. Assigning costs to cost pools
Under activity-based costing, second stage allocation would involve: a. Calculating activity rates O b. Assigning costs to cost objects. O c. Assigning costs to cost pools O d. None of the given answers . O e. Defining activity measures