COMMERCE 2AB3 Study Guide - Final Guide: Activity-Based Costing, Direct Labor Cost, Bundesautobahn 48

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Karim Karim

Document Summary

True/false: direct labor-hours should never be used as a measure of activity in an activity-based costing system. Level: medium lo: 1 ans: f: when there is a great deal of product diversity, activity-based costing will generally yield more accurate product costs than traditional overhead application rates based on direct labor or machine hours. Level: medium lo: 1 ans: t: product-level activities relate to specific products and typically must be carried out regardless of how many batches are run or units of product are made. Level: medium lo: 1 ans: t: the first-stage allocation in activity-based costing is the process by which overhead costs are assigned to activity cost pools. Level: easy lo: 1 ans: t: in activity-based costing, there are a number of activity cost pools, each of which is allocated to products using its own unique measure of activity.