63. When a department or product line is dropped, the common fixed costs which had been allocated to that department: A. Are eliminated B. Become sunk costs. C. Become variable costs. D. Are allocated to the remaining departments or product lines. 64. A two-stage system first allocates costs to: A. A product line and then allocates costs to the department. B. The cost driver and then allocates to the cost hierarchy C. Departments or activities and then allocates costs to products or services. D. None of the above 65. Multiple (departmental) manufacturing overhead rates are considered preferable to a single (plantwide) overhead rate when various products that are manufactured pass through the same departments or use the same manufacturing techniques. A. True. B. False. Activity-based costing (ABC) does not affect which of the following costs. 66. Direct Labor No Yes Yes No A. No B Yes C. Yes D. Yes 67. A major step in implementing activity-based costing (ABC) is to identify the activities that causes the consumption of resources. A. True. B. False. 68. In activity-based costing (ABC), there are a number of overhead cost pools, each of which has its own unique cost driver to allocate costs to products A. True. B. False. Which of the following is a limitation of activity-based costing (ABC)? A. ABC is in conformity with GAA!P B. ABC requires substantial resources to implement C. ABC produces numbers are at odds with traditional cost accounting systems. D. None of the above. 69. 70. The major advantage of activity-based costing (ABC) is more accurate allocation of overhead costs to a product or service A. True B. False