What are the dangers of using a single plant-wide overhead applicationrate?[2 marks]

Give four examples ofmanufacturing overhead [MOH] activitieswithin amanufacturing firm:

Give the most effective method of tracingeachMOH activity ( a cost driver).

ActivityMethodof Tracing

1._____________________________________

2._____________________________________

3._____________________________________

4._____________________________________

Give three examples ofindirectactivitieswithin a service firm:

Identify the type of service:

[ Example: Auto Repair, Computer Repair, LawFirm, AccountingFirm etc ]

Give the most effective method of tracing each activity ( a cost driver).

ActivityMethod of Tracing

1._____________________________________

2._____________________________________

3._____________________________________

Why is activity based costing [ABC] applicable innon-manufacturingorganizations?

Explain "Set-up Costs" in:

a) a manufacturing environment

b) a service business

Explain why it is important for management to understand cost behavior inorder to make good business decisions?

How can you tell that a cost is amixedcost rather than a fixed or variable cost?Provide an example.

ABC can be a powerful costing tool, if used effectively. Explain.