1) Property taxes are an example of a cost that would be considered to be:

A) Unit-level.

B) Batch-level.

C) Product-level.

D) Facility-level.

2) Parts administration is an example of a:

A) Unit-level activity.

B) Batch-level activity.

C) Product-level activity.

D) Facility-level activity.

3) Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

A) Machine-hours

B) Direct labor-hours

C) Number of orders processed

D) Cost of materials purchased

4) Production order processing is an example of a:

A) Unit-level activity.

B) Batch-level activity.

C) Product-level activity.

D) Facility-level activity.

5) Departmental overhead rates may not correctly assign overhead costs due to:

A) the use of direct labor hours in allocating overhead costs to products rather than machine time or quantity of materials used.

B) the high correlation between direct labor-hours and the incurrence of overhead costs.

C) overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production.

D) difficulties associated with identifying cost pools for the first stage of the allocation process.

6) Purchase order processing is an example of a:

A) Unit-level activity.

B) Batch-level activity.

C) Product-level activity.

D) Facility-level activity.