Reference no: EM132611183

Question 1: The benefits of activity-based costing include all of the following except:

1) more accurate costs

2) better cost estimation

3) absence of under- or over-applied overhead

4) cost management

Question 2: Which of the following is not a benefit of activity-based costing?

1) improves the accuracy of costs assigned to cost objects

2) improves the ability to estimate costs.

3) improves efficiency and lowers cost

4) implementation involves minimal effort

Question 3: Which of the following is not a limitation of activity-based costing?

1) More accurate product costs may result in better decisions.

2) Changing from a traditional direct labour based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers.

3) Implementing an activity based costing system is more costly than implementing a traditional direct labour-based costing system.

4) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity based costing system. This results in overstated costs.

Question 4: Activity-based costing:

1) does not have to be adapted for decision-making purposes

2) will still not result in 100% true costs

3) is easy to implement

4) does not lend itself to cost management