Why is direct labor a poor base for allocating overhead in many companies? Why ing to implement What are unit-level, batch-level, product-level, customer-level, and organization-sustaining activities? 7-2 7-3 top management support and cross-functional involvement crucial when attempt- are activity-based costing system? an 7-4 What types of costs should not be assigned to products in an activity-based costing system? are there two stages of allocation in activity-based costing? 7-5 Why Why is the first stage of the allocation process in activity-based costing often based on interviews? When activity-based costing is used, why do manufacturing overhead costs often shift from high-volume products to low-volume products? How can the activity rates (i.e., cost per activity) for the various activities be used to target process improvements? Why is the activity-based costing described in this chapter unacceptable for external finan- cial reports? 7-6 7-7 7-8 7-9 7-10 Why is direct labor a poor base for allocating overhead in many companies? Why ing to implement What are unit-level, batch-level, product-level, customer-level, and organization-sustaining activities? 7-2 7-3 top management support and cross-functional involvement crucial when attempt- are activity-based costing system? an 7-4 What types of costs should not be assigned to products in an activity-based costing system? are there two stages of allocation in activity-based costing? 7-5 Why Why is the first stage of the allocation process in activity-based costing often based on interviews? When activity-based costing is used, why do manufacturing overhead costs often shift from high-volume products to low-volume products? How can the activity rates (i.e., cost per activity) for the various activities be used to target process improvements? Why is the activity-based costing described in this chapter unacceptable for external finan- cial reports? 7-6 7-7 7-8 7-9 7-10