Activity-Based Costing Overview Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. The prime objective of the _____ is to find the current limitations that keep a company from achieving its goals.

Question 2 2. The choice to implement lean manufacturing is likely a sign of _____.

Question 3 3. Under ABC, 80% of John's salary is allocated to a new line of software he is developing. How much of his time is he spending establishing the supply chain for this product?

Question 4 4. Which example BEST describes a traditional costing system?

Question 5 5. John has selected the _____ accounting method because of its primary benefit of accuracy.

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Question 6 6. _____ accounting is only beneficial for internal use.

Question 7 7. John's company has determined a $96.66 per unit price to make a profit. The labor cost is $5,000 to make 150 units, and machine time cost is $3,000 to make 100 units. What is the materials cost to make 75 units?

Question 8 8. The cost per product for materials is $6.00. Therefore, $1,500 of raw materials can make how many items?

Question 9 9. Employing _____ costing, John would evenly allocate office supplies expense costs for office and remote employees, even though remote employees may have a greater need.

Question 10 10. Under ABC, batch-based level of cost would NOT be which of the following?

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Question 11 11. There are 4 _____ under ABC.

Question 12 12. _____ gives a better idea of overhead costs.

Question 13 13. Grouping _____ is called cost pools.

Question 14 14. In which cost driver pool would chemicals for a pool cleaning service MOST likely be categorized?

Question 15 15. The first step of _____ involves establishing a cost object.

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Question 16 16. A candy company spends _____ on marketing for its chocolates. White chocolate is a little harder to sell so they use about 40% on white chocolate and 30% each for dark and mild chocolates. The company sold 10,000 boxes of white chocolate and had a $0.48 indirect cost rate of marketing for white chocolate.

Question 17 17. What is activity-based costing?

Question 18 18. Which costing method calculates overhead as a function of specific activities?

Question 19 19. Which of the following finds areas that need improvement and then tries to make changes?

Question 20 20. Direct costs include which of the following?

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Question 21 21. Which of the following would be considered a service industry?

Question 22 22. What items are identified to help you calculate your overhead in the activity-based costing method?

Question 23 23.

Given this information, calculate the overhead per product using the activity-based costing method:

Cost Pool Total Cost
Machine setup $400 per batch
Personnel $1,200
Materials $400
Number of product made 2,000

Question 24 24. Which of the following is an advantage of Activity Based Costing (ABC)?

Question 25 25. What is a unit-based cost?

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Question 26 26. Activity-based management uses what type of costing?

Question 27 27. The theory of constraints wants _____, and lean manufacturing wants _____.

Question 28 28. Which of the following is NOT an indirect cost in manufacturing a product?

Question 29 29. Which of the following is a drawback to using activity-based costing?

Question 30 30.

Which of the following cost pools is this cost driver a part of?


Purchasing the paint needed to paint the custom coat racks.

Activity-Based Costing Overview Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 303: Cost Accounting  /  Business Courses
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