Reference no: EM132659104

Problem 1: Direct labor-hours or direct labor cost should not be used as a measure of activity in an activity-based costing system.

TRUE/FALSE

Problem 2: In general, transaction drivers are more accurate measures of the consumption of resources than duration drivers.

TRUE/FALSE

Problem 3: The costs of idle capacity should not be assigned to products in activity-based costing.

TRUE/FALSE

Problem 4: In traditional costing systems, all manufacturing costs are assigned to products-even manufacturing costs that are not caused by the products.

TRUE/FALSE

Problem 5: Activity-based costing involves a two-stage allocation in which overhead costs are first assigned to departments and then to jobs on the basis of direct labor hours.

TRUE/FALSE

Problem 6: When a company shifts from a traditional cost system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product costs of high volume products typically decrease whereas the unit product costs of low volume products typically increase.

TRUE/FALSE

Problem 7: Providing the power required to run production equipment is an example of a:

a. Unit-level activity.
b. Batch-level activity.
c. Product-level activity.
d. Organization-sustaining activity.