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Following is a list of statements. Identify each statement as true or false. 1. A products cost can be estimated most accurately when this cost

Following is a list of statements. Identify each statement as true or false.

1.


A product’s cost can be estimated most accurately when this cost can be traced directly to the product produced or the service provided.


select an option

2.


Overhead costs are the easiest costs to determine because they can be traced easily to the product.


select an option

3.


Activity-based costing (ABC) is an approach for allocating direct labour to products.


select an option

4.


An activity cost pool is any factor or activity that has a direct cause-effect relationship with the resources consumed.


select an option

5.


Machine hours and direct labour hours are examples of cost drivers.


select an option

6.


As manufacturing processes have become more automated, more companies have chosen to allocate overhead on the basis of direct labour costs.


select an option

7.


When overhead cost allocation systems were first developed, it was widely accepted that there was a high correlation between direct labour and overhead costs.


select an option

8.


Traditional costing systems allocate costs to departments or jobs.


select an option

9.


Activity-based costing is a one-step costing system.


select an option

10.


A traditional costing system allocates overhead by means of multiple overhead rates in each department.


select an option


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