1.Product costing consists of only direct materials and direct labor.
a.True
b.False
2.The selection of the factory overhead allocation method is important because the method selected determines theaccuracy of the product cost.
a.True
b.False
3.Managers depend on accurate factory overhead allocation to make decisions regarding product mix and productprice.
a.True
b.False
4.Managers depend on product costing to make decisions regarding continuing operations and product mix.
a.True
b.False
5.A plantwide factory overhead rate is computed by dividing total budgeted factory overhead costs by the plantwideallocation base.
a.True
b.False
6.Zorn Co. budgeted $600,000 of factory overhead cost for the coming year. Its plantwide allocation base, machinehours, is budgeted at 100,000 hours. Budgeted units to be produced are 200,000 units. Zorn's plantwide factoryoverhead rate is $6.00 per unit.
a.True
b.False
7.Bob's Biscuit Corporation budgeted $1,200,000 of factory overhead cost for the coming year. Its plantwideallocation base, machine hours, is budgeted at 100,000 hours. Budgeted units to be produced are 200,000 units.Bob's plantwide factory overhead rate is $12.00 per machine hour.
a.True
b.False
8.When a plantwide factory overhead rate is used, the total overhead costs allocated to all products are the same.
a.True
b.False
9.When a plantwide factory overhead rate is used, overhead costs are applied to all products by a single rate.
a.True
b.False
10.Use of a plantwide factory overhead rate assumes that the activities causing overhead costs are the same acrossall departments and products.
a.True
b.False