Question

True or False:

1) Direct labor costs are usually included in the costs that are allocated to activity cost pools in an activity-based costing system.

True or False:

2) In activity-based costing, a product margin may exclude costs from some of the company's activity cost pools.

Answer 1

1)

FALSE

Direct labor costs are not included in the costs that are allocated to activity cost pools in an activity-based costing system

Usually overhead costs are included in the costs that are allocated to activity cost pools in an activity-based costing system

2)

TRUE

In activity-based costing, a product margin may exclude costs from some of the company's activity cost pools.

ABC excludes some non-manufacturing overhead costs