1-Under activity-based costing, selling and administrative expenses may be allocated to

a.products.

b.customers.

c.both products and customers.

d.neither products nor customers.

2-Which of the following is the correct order for applying activity-based costing steps in a service business?

a.Allocate overhead costs to customers based upon activity-base usage, determine activity rates for each activity, and identify activities

b.Determine activity rates for each activity, identify activities, and allocate overhead costs to customers based upon activity-base usage

c.Identify activities, determine activity rates for each activity, allocate overhead costs to customers based upon activity-base usage, and invoice the customer

d.Identify activities, determine activity rates for each activity, and allocate overhead costs to customers based upon activity-base usage

3-Which of the following statements is true?

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

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

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

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

4- Countryside Bank uses activity-based costing to determine the cost of servicing customers. There are three activity pools: teller transaction processing ($2.60 per teller transaction), check processing ($0.20 per canceled check), and ATM transaction processing ($0.15 per ATM transaction). Rosa Bush had 5 teller transactions, 10 canceled checks, and 7 ATM transactions during the month. What is the total monthly activity-based cost for Rosa Bush during the month?

a.$25.50

b.$16.05

c.$34.05

d.$10.50

5- The denominator in the single plantwide factory overhead rate calculation is

a.total budgeted selling expenses.

b.total budgeted plantwide allocation base.

c.total budgeted general and administrative expenses.

d.total budgeted factory overhead in dollars.