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1.Select the incorrect statement from the following

A. Activity costs are considered relevant for decision making because the cost of an activity will be avoided if the activity is eliminated

B. Activity-based cost drivers produce better cost allocation than volume-based drivers because they distribute only relevant costs to the appropriate products

C. If overhead costs are allocated on the basis of activities, the amount of overhead allocated to a particular product can be reduced by increasing the number of activities required by the product thereby spreading the overhead costs over more units

D. If highly automated environuts where companies produce many different products with varying levels of production activity based cost drivers are superior to volume-based drivers

2. Actions or units of work undertaken by an organization to accomplish its mission are referred to as

A. activities

B. cost objects

C. costs

D. work in progress

3. Select the correct Statement from the following

A. The same cost cannot be classified as both direct and indirect

B. Relevant costs can include direct and indirect costs

C. The allocation base determines whether a cost is classified as direct or indirect

D. Direct costs always display a variable behavior pattern

4. Which of the following is not a step in allocating indirect costs to cost objects

A. Multiply the allocation rate by the weight of the cost driver

B. Compute an allocation rate by dividing the total cost to be allocated by the total cost driver volume

C. All of the answers are steps in allocating indirect costs

D. Trace direct costs to individual cost pools