Which of the following could be considered a cost driver?

a. A service provided by an architecture firm

b. A product produced by a manufacturer

c. A tax return prepared by a local CPA firm

d. All of the above

Jasmine Inc. manufactures plant-based meat products. They have always used a predetermined overhead rate based on labor hours. The production manager is switching to Activity-Based Costing and is assigning costs based on Processing and Packaging cost pools.

This switch would be expected to result in all of the following except:

a. More accurate pricing

b. Overcosting of high volume, low complexity products

c. Increased profitability from elimination of unprofitable products

d. Identification of activities that could be eliminated to improve profitabilit

Temple Lighting uses Activity-Based Costing as follows.

Activity	Cost Driver	Cost per unit	Quantity of Activity	Cost of Activity
Assembly	Direct Labor Hours	$10.00	15,000	$150,000
Design	# of options	$12.50	2,000	$25,000
Packaging	Units Produced	$2.50	10,000	$25,000

Product X requires direct material of $25.00 per unit, direct labor of $30.00 per unit, 1.5 direct labor hours, and 2 options.

Using activity-based costing, what is Temple Lightings overhead cost per unit of product?

a. $25.00

b. $42.50

c. $40.00

d. $55.00

What is the relationship between indirect costs and cost objects in activity-based costing?

a. Indirect costs are directly assigned to cost objects

b. Indirect costs decrease the price of cost objects

c. Indirect costs are expensed as period costs and have no relationship to cost objects

d. Indirect costs are assigned to products via activity cost pools