1.

For a manufacturing firm that produces multiple families of products requiring various combinations of different types of parts, what would be the best allocation base for human resource administration costs?

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Part 1

A.

machine hours

B.

electricity costs

C.

number of parts purchased

D.

direct labour hours

2.

Activity-based

costing information _______.

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Part 1

A.

will yield inaccurate cost numbers when products are similar

B.

is best used when overhead costs are minimal

C.

should be used when services place similar demands on resources

D.

helps management reduce costs along the value chain

E.

usually results in peanut butter costing

3.

Which of the following statements is TRUE concerning product costing systems?

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Part 1

A.Undercosting or overcosting does not relate to product cost

cross-subsidization.

B.

Peanut butter costing is another term for direct costing.

C.

Companies that undercost products always sell products at a loss.

D.

Companies that overcost run the risk of losing customers.

E.

Companies that overcost will make more profit by passing along higher prices to customers.