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Test bank chapter 5 activity based costing and activity based management

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EA Cost Accounting: A Managerial Emphasis, 16e, Global Edition (Horngren) Chapter 5 Activity-Based Costing and Activity-Based Management 5.1 Objective 5.1 1) Which of the following statements is true of a peanut-butter costing system? A) A peanut-butter costing system typically has more-homogeneous indirect cost pools. B) A peanut-butter costing system broadly averages or spreads the cost of resources uniformly to cost objects. C) A peanut-butter costing system assumes that all costs are variable. D) In a peanut-butter costing system, costs of activities are used to assign costs to other cost objects such as products or services based on the activities the products or services consume. Answer: B Diff: 2 Objective: 1 AACSB: Analytical thinking 2) Overcosting a particular product may result in: A) pricing the product too high B) pricing the product too low C) operating efficiencies D) understating total product costs Answer: A Diff: 2 Objective: 1 AACSB: Analytical thinking 3) For a company with diverse products, undercosting overhead of a product will lead to product-cross subsidization which means that: A) direct labor costs of the product are misallocated B) direct material costs of the product are misallocated C) indirect costs of another product are misallocated D) direct costs of another product are misallocated Answer: C Diff: 2 Objective: 1 AACSB: Analytical thinking 1 Copyright © 2018 Pearson Education, Ltd. EA 4) Aqua Company produces two products–Alpha and B ...
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