SELECT THE BEST ANSWERS (Shows computations and references are required) (15 points) 1) ABC systems create: A) One large cost pool B) Homogenous activity-related cost pools C) activity-cost pools with a broad focus D) activity-cost pools containing many direct costs 2) A single indirect-cost rate may distort product costs because: A) There is an assumption that all support activities affect all products B) It recognizes specific activities that are required to produce a product C) Costs not consistently recorded D) It fails to measure the correct amount of total costs 3) Traditional cost systems distort product costs because: A) They do not know how to identify the appropriate units B) Competitive pricing ignored C) They emphasize financial accounting requirements D) They apply average support costs to each unit of product 4) Activity-based costing (ABC) can eliminate cost distortions because ABC: A) Develops cost drivers that have a cause-and-effect relationship with the activities performed B) Establishes multiple cost pools C) Eliminates product Variations D) Recognizes interactions between different departments in assigning support costs