Check if all answers are correct.

Which of the following is typical of traditional costing systems?

Uses multiple cost drivers to allocate overhead.

It is more complicated than Activity-Based Costing systems.

Is still the best way to allocate direct labour costs.

Uses a single cost driver to allocate overhead.

Which best describes the flow of overhead costs in an activity-based costing system?

overhead costs - direct labour cost or hours - products

overhead costs - products

overhead costs - activity cost pools - cost drivers - products

overhead costs - machine hours - products

In September, Bramble Company had the following financial statement amounts related to producing 520 units:

Direct materials $28080

Depreciation expense $11440

Sales revenue $98800

Direct labour $23920

Rent expense $26000

How much is the net profit, (loss), for September?

$46800

$9360

$70720

$20800

Which one of the following is a consideration of CVP analysis?

The level of activity must remain constant over the relevant range.

Total fixed costs remain constant over the relevant range.

Total variable costs remain constant over the relevant range.

Cost behaviour can change as long as total costs remain the same at all activity levels.

How are fixed manufacturing costs handled under variable costing?

They are subtracted from the variable cost of goods sold to determine the ending inventory value that will be recorded on the Balance Sheet.

They are not recorded, which is why variable costing is not used for external reporting.

They are recorded directly on the Balance Sheet.

They are treated as period costs.

Which of the following terms would be found on an income statement using absorption costing butnoton an income statement prepared using variable costing?

Contribution margin

Variable manufacturing overhead

Fixed manufacturing overhead

Gross profit

Cuff budgets sales of its truck tires at $170 per tire and estimates that 10000 tires can be sold during the coming year. Variable costs per tire are $60 and Cuff desires a profit of $34 per tire. The target cost per tire is

$170.

$136.

$60.

$110.

Which of the following is a true statement about costs in incremental analysis?

Variable costs are always relevant.

Fixed costs are never relevant.

Fixed costs are always relevant.

Both variable and fixed costs can be relevant.