Activity Based Costing Systems Assume Thata Activities Consume Overh ✓ Solved

Activity-based costing systems assume that: a. Activities consume overhead costs b. Overhead costs are insignificant c. All of these are correct d. Products consume overhead costs Which of the following is the correct sequence of the five steps of implementing and using an activity-based costing system? a.

Use the cost data to make decisions, analyze individual overhead costs in terms of those cost activities, identify measurable cost drivers, assign overhead, and identify overhead cost activities b. Identify measurable cost drivers, assign overhead, identify overhead cost activities, analyze individual overhead costs in terms of those cost activities, and use the cost data to make decisions c. Identify overhead cost activities, identify measurable cost drivers, assign overhead, analyze individual overhead costs in terms of those cost activities, and use the cost data to make decisions d. Identify overhead cost activities, analyze individual overhead costs in terms of those cost activities, identify measurable cost drivers, assign overhead, and use the cost data to make decisions Which of the following is a management philosophy on increasing profitability by improving the quality of products and processes? a.

Process management b. Balanced scorecard management c. Costs of quality measurement d. Total quality management Which of the following is the income statement formula for the absorption costing method? a. Sales Revenue - All Variable Costs = Contribution Margin - All Fixed Expenses = Operating Income b.

Sales Revenue - Cost of Goods Sold = Gross Margin - Selling and Administrative Expenses = Operating Income c. Sales Revenue - Cost of Goods Sold = Gross Margin - All Fixed Expenses = Operating Income d. Sales Revenue - Variable Manufacturing Costs = Contribution Margin - Fixed Manufacturing Costs = Operating Income Which of the following is the income statement formula for the variable costing method? a. Sales Revenue - All Variable Costs = Contribution Margin - All Fixed Expenses = Operating Income b. Sales Revenue - Cost of Goods Sold = Gross Margin - All Fixed Expenses = Operating Income c.

Sales Revenue - Cost of Goods Sold = Gross Margin - Selling and Administrative Expenses = Operating Income d. Sales Revenue - Variable Manufacturing Costs = Contribution Margin - Fixed Manufacturing Costs = Operating Income Exhibit 20-5 Barron Company manufactured 150,000 units during the year but only sold 130,000 of these units. At the beginning of the year, Barron had no beginning finished goods inventory. The following unit costs were incurred during the year: Variable manufacturing cost