Question

1. Indirect manufacturing costs are easily traceable to products. answer ch ny uses ti ses direct s as its all 2. One important reason that managers allocate overhead costs to products is to promote efficient use of resources. Departmer Departmen 3. U.S. Generally Accepted Accounting Principles require all manufacturing costs be allocated products for inventory costing purposes. 4. Total company wide estimated overhead costs will change depending on if plant wide allocation or departmental allocation is used. the allocati sembly $1 ssembly = $ Assembly = Assembly None of the 5. The plant wide approach to allocating overhead is typically the simplest and least expensive approach. 6. Companies that use the least number of cost pools possible tend to have the most accurate overhead allocation process. 1 of the follo departmer activity 3. plant wis d. product e. Nonec 7. Organizations can allocate overhead in a variety of ways, resulting in a number of different product costs for the same product.. The pred a. Estin b. Esti c. Esti d. Est 8. Activity-based costing breaks total estimated overhead costs out into different departments to establish an overhead rate for each department. Ž 9. Value-added activities are typically ignored when using activity-based management. 15. ACC 10. Appraisal costs are the same as detection costs.

true or false

Answer 1

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Ans:

1. False: direct manufacturing costs are easily traceable to products.

2. True: there are three important reasons i.e.: provide information for decision making, promote efficient use of resources and comply with U.S. GAAP.

3. True: U.S. GAAP requires all manufacturing costs such as direct material, direct labor and overhead costs be allocated to products for inventory costing purpose.

4. False: total companywide estimated overhead costs would not affect.

5. True: plantwide allocation approach is typically the simplest and least expensive.

6. False: companies that use the least number of cost pools possible, that doesn't have the most accurate overhead allocation process.

7. True: organizations that allocate overhead in a variety of ways, results a number of different product costs for the same product.

8. False: activity-based costing breaks total estimated overhead costs for each activity.

9. False: value-added activities are used to determine the non-value-added activity in activity-based management.

10. True: appraisal costs are the same as detection costs.

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