Reference no: EM132700493

Problem 1: ABC differs from traditional product costing because it uses multiple allocation bases and therefore, allocates costs (such as overhead costs) more accurately. This normally results in

a. Equalizing set up costs for all product lines
b. Lower set up costs being charged to low volume products
c. Decreased units' costs for low-volume products than is reported by traditional product costing systems
d. Substantially greater unit costs for low-volume products than is reported by traditional product costing system.

Problem 2:  The allocation base that would most likely be the best for allocating the indirect costs of marketing function is

a. Number of shipments
b. Number of salespersons
c. Number of customer phone calls
d. Direct labor hours