ACCT 212 Chapter 4: Activity-Based Costing Exam Study Guide
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Course
ACC 212
Institution
ACC 212
ACCT 212 Chapter 4: Activity-Based
Costing Exam Study Guide
Activity-Based Costing (ABC) - Answer-A two-stage costing method in which overhead costs are
assigned to products on the basis of the activities they require.
Activity - Answer-An event that causes the consumption of overhead resources...
Benchmarking - Answer✔✔-A systematic approach to identifying the activities with the greatest room
for improvement. It is based on comparing the performance in an organization with the performance of
other, similar organizations known for their outstanding performance.
Which of the following statements is false? (You may select more than one answer.)
a) In recent years, most companies have experienced increasing manufacturing overhead costs in
relation to direct labor costs.
b) Batch-level costs do not depend on the number of units produced in a batch.
c) Facility-level costs are not caused by particular products.
d) Product-level costs are larger for high-volume products than for low-volume products. - Answer✔✔-D
Which of the following statements is true? (You may select more than one answer.)
a) The costs of a unit-level activity should be proportional to the number of units produced.
b) Unit-level activities are performed each time a unit is produced.
c) Setting up equipment is an example of a unit-level activity.
d) Activity-based costing systems may use direct labor-hours and/or machine-hours to assign unit-level
costs to products. - Answer✔✔-A, B, and D
Which of the following explain why activity-based costing improves product cost accuracy when
compared to traditional methods? (You may select more than one answer.)
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