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Question 3: Choose the correct answer (20 POINTS) (FILL IN YOUR ANSWERS ON THE ANSWER SHEET) 1. A grouping of individual costs whose total is allocated using one allocation base is called a a cost objective. b. cost pool. c. direct cost. d. sunk cost. 2. The traditional approach to cost allocation a. tends to over-cost high volume core products. b. usually requires more cost pools than ABC. c. attempts to identify the activities that cause costs. d. produces more accurate costs than any other method. 3. Which of the following is an example of a manufacturing overhead cost? a. Security at the manufacturing plant b. Fabric used to produce shirts c. Cost of shipping product to customers d. The salary of the president of the company 4. The following costs were incurred in September: Conversion costs during the month totaled: a. $50,000 b. $59,000 c. $137,000 d. $67,000 5. Normal spoilage includes a. Spoilage that arises because operations are out of control b.Spoilage that arises as a regular part of ordinary production c. Spoilage that arises when external events cause a lot of units to be spoiled d. Reworked units 6. ABC systems are similar to traditional costing systems in the way they a. Allocate direct costs to cost objects b. Define cost allocation bases c. Trace direct costs to cost objects d. Trace indirect costs to activities