What are some of the advantages of variable costing?

	a.	It eliminates the distortions to income and product costs when volume changes
	b.	Neither of the answers are correct
	c.	Both answers are correct
	d.	It reduces the dysfunctional incentives to overproduce

2.00000 points

QUESTION 2

What is a purpose(s) for implementing activity-based costing?

	a.	Both answers are correct
	b.	Neither answer is correct
	c.	To change incentives of operating managers
	d.	To develop more "accurate" product or product-line costs

2.00000 points

QUESTION 3

Which of the following statements is true regarding activity-based management (ABM)?

	a.	ABC cost data helps managers identify which products to produce
	b.	All of the answers are correct
	c.	Business activities are identified and evaluated for potential streamlining or elimination
	d.	ABC cost data helpd managers identify which customers to retain

2.00000 points

QUESTION 4

When traditional absorption costing is employed, which of the following is FALSE?

	a.	In a single-product organization, product costs are accurately reported for decision-making purposes
	b.	In a multi-product organization, product costs are accurately reported for decision-making purposes
	c.	In a single-product organization, product costs are properly reported for financial reporting purposes
	d.	In a multi-product organization, product costs are properly reported for financial reporting purposes

2.00000 points

QUESTION 5

Which of the following is a mutually exclusive cost pool used in activity-based cost accounting?

	a.	Batch level
	b.	Product level
	c.	All of the answers are correct
	d.	unit level

2.00000 points

QUESTION 6

What are some of the potential problems with using variable costing?

	a.	Both of the answers are correct
	b.	It is difficult to determine which costs are fixed and which are variable
	c.	It produces unit cost figures that contain no estimate of the opportunity cost of capacity
	d.	Neither of the answers are correct

2.00000 points

QUESTION 7

Which of the following is a correct matching of terms?

	a.	Depreciation of equipment is a batch-level cost
	b.	Package design is a production-sustaining cost
	c.	Insurance is a product-level cost
	d.	Cutting a table leg is a unit-level cost

2.00000 points

QUESTION 8

Which of the following statements is true regarding Activity-Based Costing (ABC)?

	a.	Activity-Based Costing includes analysis of cost drivers
	b.	Activity-Based Costing can be applied to service-oriented firms
	c.	Activity-Based Costing can be applied to manufacturing firms
	d.	All of the answers are correct

2.00000 points

QUESTION 9

Absorption costing of inventories, as required by US GAAP, has been criticized for encouraging managers to increase year-end inventories in order to boost reported profits. Which of the following techniques is the most effective at resolving this problem?

	a.	Senior management control of inventory levels
	b.	Adoption of just-in-time (JIT) production system
	c.	Use variable costing to determine income for bonus purposes
	d.	Reward managers based upon the residual income approach

2.00000 points

QUESTION 10

One should always be wary of using unit costs for decision-making, because unit costs:

	a.	can be multiplied by a different number of units, suggesting that the cost data is scalable
	b.	ignore step-fixed costs
	c.	disguise the true nature of how costs vary with prodution
	d.	generate misleading results when the company faces an increasing cost curve
	e.	All of the answers are correct