1. Which of the following statements about activity-based costing (ABC) is false?

In comparison with traditional costing systems, ABC tends to use more cost pools and more cost drivers.

In comparison with traditional-costing systems, ABC results in less cost "averaging" of various diversified activities.

In comparison with traditional-costing systems, ABC results in more costs being classified as direct costs

None of the above

2. A company using very tight standards in standard cost system should expect that

No incentive bonus will be paid

Costs will be controlled better that if lower standards were used

Employees will be strongly motivated to attain the standards

Most variances will be unfavorable

3. The principal advantage of scatter graph over high low method is that scatter diagram method:

includes cost outside the relevant range

considers more than two points

can be used with more types of costs than high low method

Gives a precise mathematical fit of the points to the line.

4. Effective planning of fixed overhead costs includes all of the following except

planning day-to-day operational decisions.

eliminating nonvalue-added costs.

planning to be efficient.

choosing the appropriate level of capacity.