1) Which of the following best describes a document that initiates changing a product or process?

a.a retooling setup order

b.an activity cost pool analysis

c.an engineering change order

d.an activity rate allocation report

2) Which of the following statements is true?

a.Activity rates are calculated by dividing the activity base by budgeted activity cost.

b.Factory overhead costs using activity rates are allocated to products by dividing the activity-base usage by the activity rate.

c.Using the activity-based costing method typically results in more accurate product costs than the single plantwide rate.

d.Product cost distortion cannot occur when the multiple production department rate method is used.

3) Jason's Outdoors manufactures two products: snow skis and water skis. Jason's managerial accountant suspects that product cost distortion through factory overhead allocation is occurring where snow skis are underpriced and water skis are overpriced. As a result, all of the following statements are true except

a.Jason's accountant should consider a single plantwide rate to correct the problem.

b.Snow skis likely consumed a larger proportion of factory overhead than was allocated.

c.Jason may incorrectly decide to expand production of snow skis.

d.Jason will likely lose sales of water skis.

4) Which of the following is true regarding quality control inspections?

a.Neither of these choices are required.

b.Both of these choices are required.

c.Inspection requires product reassembly.

d.Inspection requires product tear down.

5) Activity-based costing allocates selling and administrative expenses

a.based on how each product consumes activities.

b.based on sales volume in dollars.

c.based on sales volume in units.

d.in accordance with GAAP.