1. Why would management be concerned about the accu- racy of product costs? allocating these activities to products for financial state- ment reporting be acceptable according to GAAP? 7. What would happen to net income if the activities noted in Discussion Question 6 were allocated to prod- ucts for financial statement reporting and the inventory 2. Why would a manufacturing company with multiple production departments still prefer to use a single plant- wide overhead rate? increased? 3. How do the multiple production department and the single plantwide factory overhead rate methods differ? 8. Under what circumstances might the activity-based cost- ing method provide more accurate product costs than the multiple production department factory overhead rate method? 4. Under what two conditions would the multiple produc- tion department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method? 5. How does activity-based costing differ from the multiple production department factory overhead rate method? 9. When might activity-based costing be preferred over using a relative amount of product sales in allocating selling and administrative expenses to products? 6. Shipping, selling, marketing, sales order processing, return processing, and advertising activities can be related to products by using activity-based costing. Would 10. How can activity-based costing be used in service companies