Question

with unit-level activities r possible 10) Managing and sustaining product diversit, reers than managing product diversity requires many more overhead resources such as Thschuls and product design engineers than managing and sustaining activi -based costing than traditional costing which is based entirely on direct labor-hours. s using activity 11) A traditiona system I cost system is generally easier to set up and run than an activity-based costing 12) Departmental overhead rates will correctly assign overhead costs in situations company has a range of products that differ in volume, lot size, or where a complexity of production. 14) Organization-sustaining activities are carried out regardless of which customers are served which products are produced, how many batches are run, or how many units are made. 15) When activity-based costing is used for internal decision-making, the costs of idle capacity should be assigned to products. 19) First-stage allocations in an ABC system should not be based on the opinions of employees about how costs should be distributed among activity cost pools. 20) In an ABC system, departmental managers are typically interviewed to determine how the departmental non-personnel costs should be distributed across the activity cost pools. McGraw-Hill Education. All rights reserved. No reproduction or distribution without the pric Copyright 2019 written consent of McGraw-Hill Education.

Answer 1

10. True. Activity based costing gives more accurate results in comparision to traditional costing

11. True. Traditional costing is not complex like active based costing, so setting up of traditional costing is easier

12.False. A single departmental overhead rate will be not provide proper rate if the level of activity is high

14.True. Organizational sustaining is required regardless of any factors.

15.False. Cost of idle capacity are not assigned in ABC costing

19.False. Opinions of employees is very important as they give insight of the activities.

20. True. Employees are interviewed to get the information to allocate the costs