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8. A traditional single-pool cost allocation system will assign similar costs as a multi-pool activity based costing system when: A. Indirect costs are a relatively
8. A traditional single-pool cost allocation system will assign similar costs as a multi-pool activity based costing system when: A. Indirect costs are a relatively small portion of total costs B. All customers consume the same proportion of overhead costs for each separate activity C. The cost drivers in ABC have a high R? D. Senior Management is committed to supporting the traditional costing system E. Both A and B are correct 11. Atlantic Shipyards builds large ships. At the beginning of last year, all of their facility was dedicated to building a single very large ship. The ship was not completed until this next year. Fixed overhead costs, which are allocated on the basis of direct labour hours, were greater than budgeted by $1.2 million. As well, there was a favourable production volume variance of 1.3million. Most likely, at the end of last year there was entry to clear out variances that included: A. DR to COGS of 2,500,000 B. CR to COGS of 2,500,000 C. CR to WIP of 100,000 D. DR to COGS of 100,000 E. CR to COGS of 100,000
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