61.Which of the following would be classified as a batch level activity?
A. Depreciation on production equipment
B. Inspection of a product, where each unit must be individually inspected
C. Changing machine configuration before starting a production run
D. Sales commissions
62.Sales commissions are an example of:
A. unit-level activities.
B. batch-level activities.
C. facility-level activities.
D. product-level activities.
63.Depreciation on a manufacturing facility is an example of a(n):
A. unit-level activity.
B. batch-level activity.
C. product-level activity.
D. facility-level activity.
64.Which of the following is the most appropriate cost driver for maintaining parts inventory?
A. Number of parts for a product
B. Direct labor hours
C. Sales dollars
D. Number of setups
65.Direct labor hours is an appropriate cost driver when:
A. production is labor intensive.
B. overhead costs increase.
C. production is automated.
D. all of these answers are correct.
66.Increasing automation in a manufacturing facility will likely:
A. increase the number of direct labor hours and decrease overhead costs.
B. decrease the number of direct labor hours and increase overhead costs.
C. decrease the number of direct labor hours and decrease overhead costs.
D. None of these answers is correct.
67.Which of the following statements regarding activity based cost drivers is correct?
A. Activity based cost drivers are measures of activity that are directly associated with production.
B. Activity based cost drivers are directly related to the volume of production.
C. Activity based cost drivers improve the accuracy of direct cost allocations.
D. None of these answers is correct.
68.Which activity is likely to be involved in the acquisition of raw materials?
A. Identifying potential suppliers
B. Getting price quotations
C. Preparing purchase orders
D. All of the other answers are correct.
69.Which of the following statement(s) regarding activity-based costing is(are) true?
I. Use of activity based costing improves cost tracing by using more cause-and-effect relationship to assign indirect costs to activity centers.
II. An activity based system is characterized by multiple cost pools and multiple volume and activity cost drivers.
III. Activity-based costing can cause distortion of cost, assigning too much cost to some products and too little to others.
A. I and III
B. I and II
C. II and III
D. III only
70.Which of the following statements regarding unit-level activities is(are) true?
I. Unit-level activities occur each time a batch of units is produced.
II. Unit-level costs follow a variable cost behavior pattern.
III. Unit-level activities benefit the production as a whole and are not related to any specific product.
A. I only
B. I and II
C. II and III
D. II only