1.The allocation of indirect costs in an activity-based costing system
- may require other costs to be allocated to activities before the costs of the activities can be allocated to the products.
- is simplified because more costs are identified as direct costs.
- requires the use of heterogeneous cost pools.
- is simplified because a limited number of activities are identified as cost objects.
2.The MOST likely example of an output unit-level cost is
- general administrative costs.
- paying suppliers for orders received.
- engineering costs.
- machine depreciation.
3.Different products consume different proportions of manufacturing overhead costs because of differences in all of the following EXCEPT
- selling prices.
- customers' customization specifications.
- setup times.
- product design.
4.A PRIMARY reason for assigning selling and distribution costs to products for analytical purposes is
- to justify a product mix.
- that controllers are required to assign all costs when valuing inventories.
- that different processes, products, and customers require different quantities of selling and distribution activities.
- that all indirect costs must be assigned.
5.Products make diverse demands on resources because of differences in all of the following EXCEPT
- volume.
- selling price.
- batch size.
- complexity.
6.Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $80,000. The budgeted number of nozzles to be inserted is 40,000. What is the budgeted indirect cost allocation rate for this activity?