When activity based costing is implemented, the initial outcomeis normally that:
A. The cost of all products will be higher.
B. The cost of all products will be lower
C. The cost of low volume products will be higher and the costof high volume products will be lower
D. The cost of low volume products will be lower and the cost ofhigh volume products will be higher.
When activity based costing is implemented, the initial outcomeis normally that:
A. The cost of all products will be higher.
B. The cost of all products will be lower
C. The cost of low volume products will be higher and the costof high volume products will be lower
D. The cost of low volume products will be lower and the cost ofhigh volume products will be higher.
Related questions
1.If there is a change in the level of the number of unitsproduced:
a.fixed costs per unit will be the same and variable costs per unitwill change.
b.fixed and variable costs per unit will change.
c.fixed and variable costs per unit will remain the same.
d.fixed costs per unit will change and variable costs per unit willbe the same.
2.Which of the following will decrease a companyâs breakevenpoint?
A) Decreasing the contribution margin per unit.
B) Increasing the variable cost per unit.
C) Increasing the total fixed costs.
D) Increasing the selling price per unit.
3.In generating cost information fordetermining whether or not to delete a product line, the mostimportant distinction to identify is: | ||
A) | direct versus indirect costs | |
B) | fixed versus variable costs | |
C) | manufacturing versus non-manufacturing costs | |
D) | avoidable versus unavoidable costs | |
4.Which of the following is the proper sequence in anactivity-based costing system?
A) Identification of cost drivers, identification ofcost pools, calculation of cost application rates, assignment ofcost to products.
B) Identification of cost pools, identification of costdrivers, calculation of cost application rates, assignment of costto products.
C) Assignment of cost to products, identification ofcost pools, identification of cost drivers, calculation of costapplication rates,.
D) Calculation of cost application rates,identification of cost drivers, identification of cost pools,assignment of cost to products.
5.Which of the following statements is true?
A) A traditional volume-based system based on directlabor generally undercosts high volume product lines.
B) In a traditional volume-based costing system basedon direct labor, low volume products generally subsidize highvolume products.
C) An activity-based costing system generallyundercosts low-volume, complex product lines.
D) A traditional volume-based costing system based ondirect labor generally undercosts low-volume, complex productlines.
6.Hamilton Company applies overhead based on direct labor hours.At the beginning of 2005, the company estimated that manufacturingoverhead would be $700,000, and direct labor hours would be 10,000.Actual overhead by the conclusion of 2005 amounted to $800,000 andactual direct labor hours were 14,000. On the basis of thisinformation, Horton's 2005 predetermined overhead rate is:
A) $50.00
B) $70.00
C) $80.00
D) $57.14
