There are four steps in the two-stage cost allocation process using ABC. Which of the following is not one of those steps? Select a cost driver for each activity cost pool. O Form activity cost pools and assign indirect costs to each pool. Identify and classify activities. Identify the volume-based cost driver. The traditional volume-based cost systems (vs. ABC) may distort product costs because it ignores competitive pricing it emphasizes financial accounting requirements it employs multiple cost drivers It applies average indirect costs to each unit of product using a single cost driver. Which of the following would be an acceptable cost driver for quality control costs incurred in producing wine? Number of wholesale customers. Number of truckloads shipped, Number of inspections performed. Number of bottles produced. 1.5 pts > Question 4 Which of the following is correct about ABC? It is inexpensive to implement and operate than the traditional method, It works best with companies that produce only one product. It uses a single predetermined overhead rate calculated from estimates of the total manufacturing overhead cost and the total amount of cost driver. It assigns indirect costs to products and services based on the activities required. Which of the follos statements about Activity Based Costing (ABC) is not correct? An activity cost driver should ideally have a cause-and-effect relationship with the underlying activity. When forming activity cost pools, the goal is to create as few cost pools as possible, while still capturing major activities. The ABC hierarchy of activities consists of two categories: batch or product-level activities. To compute an activity rate, divide the total activity cost by the total activity driver. Question 7 1.5 pts What is Activity-Based Management? a method of management to improve operations or reduce costs based on ABC data a method of management where materials are purchased and units are made only as they are needed to satisfy customer demand a method of management that determines what the product's cost must be given its market price and desired profit a method of assigning indirect costs to products or services based on the activities they require Which of the following statements about total quality management is correct? Legal fees and fees for damages are associated with appraisal costs. Internal failure costs result from defects that are discovered after the product has made its way into the customer's hands. Prevention costs are incurred to keep quality problems from happening in the first place. External failure costs occur before a defective product makes its way into the hands of the customer