1. Cost allocation methods that provide the most accurate full cost for financial reporting also provide the most accurate information for making decisions within the company. (Points: 2) True False 2. From a decision-making standpoint, the allocated cost should measure the sunk cost of using a company resource (Points: 2) True False 3. Allocating actual service department costs allows the service departments to pass on the costs of inefficiencies to the production departments. (Points: 2) True False 4. Managers should not be held responsible for controllable costs. (Points: 2) True False 5. Full cost information (Points: 2) is required by GAAP for external reporting purposes. does not require allocation of indirect costs. provides managers with the most accurate information for making decisions. treats all costs as fixed costs. 6. An allocation of a predetermined amount that is not affected by changes in the activity level of the organizational unit receiving the allocation is called a(n) (Points: 2) allocation base. unitized cost. lump-sum allocation. cost driver. 7. Which of the following is likely to occur when more overhead cost pools are used? (Points: 2) Product costs will be more accurate. Recordkeeping will be more expensive. Decisions such as product pricing will be improved. All of the above are true. 8. Which of the following is not an advantage of activity-based costing (ABC) over traditional volume based costing systems? (Points: 2) ABC may lead to improvement in cost control as managers are charged for using activities ABC is less likely than a traditional system to undercost complex products. ABC is less costly to implement than traditional systems. All of the above are advantages of ABC. 9. Jarme Company makes two products and is implementing an activity-based costing (ABC) system. Previously, all overhead had been applied on the basis of machine hours. The company produces 100,000 units of product D and 5,000 units of product F annually. What is the overhead cost per unit for Product D using ABC? (Points: 2) $63.50 $430 $68 $340 10. Magazine Company uses activity-based costing. The company produces weekly and monthly magazines. The estimated costs and expected activity for each of the activity pools follow: How much is the activity rate for activity 1? (Points: 2) $19.00 $13.06 $18.10 $14.25