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Activity based Costing and Management
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Activity based Costing and Management – MCQs
18 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
Which type of product demands significant resources yet has a low cost per unit?
A product that is under costed
A product that is over costed
An anticipated under cost product
An anticipated over cost product
None of the above
2.
Which costing method designates specific activities as the primary cost objects?
production costing
activity-based costing
cost allocation method
foundation costing
none of the above
3.
When applying the activity-based costing approach, how are indirect expenses distributed?
Without using any cost pools
Through one or two designated cost pools
By continuous tracking methods
Via support-related tracing
Indirect costs are not allocated
4.
Which of the following factors contribute to speeding up the refinement of a costing system?
Growth in the variety of products offered
Rise in overhead or indirect expenses
Intensified competition in the product marketplace
All the factors mentioned above
None of the above
5.
Which category describes a product that uses minimal resources but has a high cost per unit?
anticipated under expenditure
anticipated over expenditure
under-costed product
over-costed product
none of the above
6.
Which term best describes a detailed method used to allocate the cost of revenue to specific cost objects?
advanced costing method
enhanced sales system
indeterminate costing approach
specified sales methodology
no classification
7.
In activity-based costing, the variation in a product's requirements is influenced by which factors?
quantity of batches produced
level of product complexity
number of operational steps involved
all of the above factors combined
none of these
8.
In an activity-based costing system, what term is used to identify a single unit of work or task that serves a distinct function?
a unique assignment
a cost objective
an activity
an allocated expense
none of the above
9.
What is the term for a costing method where a company assigns a lower cost to one product while charging higher costs to one or more other products?
service-cost cross subsidization
product price cross subsidy
product cost cross subsidization
cross subsidizing of products
none of the above
10.
How is the budgeted indirect cost rate determined using the budgeted total cost in the indirect cost pool and the budgeted total quantity of the cost allocation base?
Predicted direct cost ratio
Planned indirect cost rate
Anticipated indirect cost ratio
Direct cost budget percentage
Not applicable
11.
What term describes the expenses associated with each unit of a specific product or service?
goal-related expenses
costs per output unit
input-related expenses
activity-based costs
none of the above
12.
Within the framework of activity-based costing, how are output unit-level costs categorized?
Overhead expenses
Direct expenses
Workforce expenses
Material expenses
None of the above
13.
What term is used for the expenses incurred to maintain and support specific products?
anticipated support expenses
input maintenance costs
output maintenance charges
product support costs
none of the above
14.
What is the name of the classification system that organizes cost pools based on various cost allocation types and their drivers?
cost hierarchy
price hierarchy
activity classification
objective hierarchy
none of the above
15.
Which category of costs cannot be directly assigned to specific products but are essential for maintaining the overall organization?
product-specific overhead expenses
organization-wide sustaining costs
direct allocation costs
support-related tracing expenses
no associated costs
16.
Which type of cost pool groups costs that share a similar cause-and-effect relationship with their respective cost drivers used for allocation?
diverse price pool
uniform cost pool
divergent cost pool
consistent price pool
none of the above
17.
In an activity-based costing system, how can the descriptions of activities be categorized?
activity inventory
activity glossary
active objective
both A and B
none of the above
18.
Which type of costs are incurred for a collection of products instead of a single item?
Costs related to individual activities
Costs associated with inputs
Costs linked to batches of products
Costs dependent on total output
None of the above
Activity based Costing and Management – MCQs | PakQuizHub