Question

Following is a list of statements. Identify each statement as true or false.

1.		A product’s cost can be estimated most accurately when this cost can be traced directly to the product produced or the service provided.		select an option                                                           TrueFalse
2.		Overhead costs are the easiest costs to determine because they can be traced easily to the product.		select an option                                                           TrueFalse
3.		Activity-based costing (ABC) is an approach for allocating direct labour to products.		select an option                                                           TrueFalse
4.		An activity cost pool is any factor or activity that has a direct cause-effect relationship with the resources consumed.		select an option                                                           TrueFalse
5.		Machine hours and direct labour hours are examples of cost drivers.		select an option                                                           TrueFalse
6.		As manufacturing processes have become more automated, more companies have chosen to allocate overhead on the basis of direct labour costs.		select an option                                                           TrueFalse
7.		When overhead cost allocation systems were first developed, it was widely accepted that there was a high correlation between direct labour and overhead costs.		select an option                                                           TrueFalse
8.		Traditional costing systems allocate costs to departments or jobs.		select an option                                                           TrueFalse
9.		Activity-based costing is a one-step costing system.		select an option                                                           TrueFalse
10.		A traditional costing system allocates overhead by means of multiple overhead rates in each department.		select an option                                                           TrueFalse

Answer 1

1	True
2	False
3	False
4	False
5	True
6	False
7	True
8	True
9	False
10	False