Multiple Choice 1) Which of the following statements is true of a peanut-butter costing system? A) A peanut-butter costing system typically has more-homogeneous indirect cost pools. B) A peanut-butter costing system broadly averages or spreads the cost of resources uniformly to cost objects. C) A peanut-butter costing system assumes that all costs are variable. D) In a peanut-butter costing system, costs of activities are used to assign costs to other cost objects such as products or services based on the activities the products or services consume. 2) For a company with diverse products, undercosting overhead of a product will lead to A) misallocating direct labor costs of the product. B) misallocating direct material costs of the product C) misallocating indirect costs of another product D) misallocating direct costs of another product 3) Activity based costing system differs from traditional costing systems in the treatment of A) direct labor costs B) direct material costs C) prime costs D) indirect costs is an example of an output unit-level cost in the cost hierarchy. 4) A) Factory rent expense B) Building security costs C) Top management compensation costs D) Machine depreciation 5) For a company which produce its products in batches, the CEO's salary is a(n). A) batch-level B) output unit-level C) facility-sustaining D) product-sustaining cost. 6) Which of the following statements is true of ABC systems? A) ABC systems are time-driven cost systems. B) ABC systems classify some direct costs as indirect costs and some indirect costs as direct costs. C) ABC systems provide valuable information to managers beyond accurate product costs. D) ABC systems assume all costs are variable costs.