Question

ABC systems ________. Select one: a. usually will undercost complicated or complex products b. will limit...

ABC systems ________.

Select one:

a. usually will undercost complicated or complex products

b. will limit cost drivers to units of output

c. highlight the different levels of activities

d. will allocate costs based on the overall level of activity

Homework Answers

Answer #1

ABC Systems highlight the different levels of activities.

Hence, correct option is (C)

In this technique, the items of inventory are classified according to the value of usage. Materials are classified as A, B and C according to their value. The principle to be followed is that the high value items should be controlled more carefully while items having small value though large in numbers can be controlled periodically. In ABC Systems, costs are not allocated based on overall level of activity. Hence, options (A), (B) and (D) are not correct.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A firm produces two products, X and Y and uses activity based costing to allocate overhead...
A firm produces two products, X and Y and uses activity based costing to allocate overhead costs. The various activities undertaken by the firm and the overhead cost pools and cost drivers are summarised below. Overhead activity Overhead cost Cost driver Cost driver consumption X Y Machining $125,000 Machine hours 25 75 Setups $ 80,000 Number of setups 24 36 Engineering $120,000 Engineering hours 120 80 If the firm uses the above cost drivers to allocate the overhead of each...
1) Top management compensation cost is an example of ________ in the cost hierarchy. A) unit-level...
1) Top management compensation cost is an example of ________ in the cost hierarchy. A) unit-level costs B) batch-level costs C) product-sustaining costs D) facility-sustaining costs 2) Which of the following statements is true of ABC systems? A) ABC system will always result in higher product costs. B) ABC system employs multiple activity-cost drivers. C) ABC system is least suited for service companies. D) ABC system is simpler compared to traditional systems. 3) Costs such as supervision, depreciation, maintenance, supplies,...
HomeGardens Ltd is a manufacturer of garden fertiliser, and has two main products: VegieGrow and FlowerFood....
HomeGardens Ltd is a manufacturer of garden fertiliser, and has two main products: VegieGrow and FlowerFood. At present, the company’s management accountant allocates overhead using a factory-wide application rate based on direct labour costs. However, consideration is now being given to implementing an activity-based costing (ABC) system. Two activity cost pools have been developed as follows: Cost pool 1. Processing 2. Packaging Activity undertaken Acquisition and processing of raw materials processed Products packaged ready for delivery to customers Cost driver...
Does your company/organization employ an activity-based cost system (ABC), or something similar? Do you identify the...
Does your company/organization employ an activity-based cost system (ABC), or something similar? Do you identify the activities needed to produce your products or services, and then assign costs to them for pricing or other purposes? Have you identified cost pools, with a cost driver assigned to each cost pool? Cost pools could be departments within your organization or particular process or steps in the production of a good or service. Have you adjusted the cost pools or cost drivers recently?...
1) ABC Company sells two products. A and B. The weighted average per unit is $36...
1) ABC Company sells two products. A and B. The weighted average per unit is $36 and fixed costs are $20,300. The sales mix is 55% for A and 45% for B. How many units of Product B must be sold by ABC Company to break-even? 2) Using the high low method, ABC Company calculated the variable cost as $2.2 per unit. The high level of the activity was 2,300 units and $20,974 of total cost. Total fixed costs equal...
a) Smith Industries uses activity-based costing to determine the costs of its two products: A and...
a) Smith Industries uses activity-based costing to determine the costs of its two products: A and B. The estimated total cost and expected number of activities for one of the company's activity cost pools are: Cost Product A Product B $14,000 400 300 Using activity-based costing, what is the activity rate for this activity? b) Jones and Sons, Inc. uses activity-based costing to compute product costs. Estimated costs totaled $40,000 and expected number of activities equals 2,500 for a particular...
1. Which of the following procedures best describes activity-based costing? Select one: A. All overhead costs...
1. Which of the following procedures best describes activity-based costing? Select one: A. All overhead costs are recorded as expenses as incurred. B. Overhead costs are assigned to departments; then costs are assigned to products. C. Overhead costs are assigned directly to products. D. Overhead costs are assigned to activities; then costs are assigned to products. 2. Which of the following product costing methods produces the most precise product costing information? Select one: A. Activity-based costing B. Departmental overhead rate...
Waymire Ltd. currently uses a traditional costing system based on direct labour hours to allocate overhead....
Waymire Ltd. currently uses a traditional costing system based on direct labour hours to allocate overhead. This year, the company has budgeted to produce 1721 units of one of its products. Each unit requires 4 hours of direct labour. For the coming year, the company is considering changing to an activity based costing system by allocating overhead based on 3 activities. The following are the activities, budgeted total cost and cost drivers per activity for the upcoming year: Activity Cost...
Langos Company manufactures two products, S and R. Data concerning the current period’s operations are given...
Langos Company manufactures two products, S and R. Data concerning the current period’s operations are given below: Product S Product R Estimated volume 4507 units 2897 units Direct materials cost per unit $13.58 $1.95 Direct labour cost per unit $20.35 $5.57 The company uses an activity-based costing system, with three activity cost pools, to allocate overhead. Data relating to these activities for the current period are given below: Activity Estimated Expected Activity Cost Pool Overhead Costs Product S Product R...
Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup,...
Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Activity Cost Activity Base Production setup $250,000 Number of setups Material handling 150,000 Number of parts General overhead 80,000 Number of direct labor hours Each product's total activity in each of the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT