1.      Activity based costing can be applied to: (1 point)

a. Manufacturing activities only.
b. Service activities only.
c. Merchandising activities only.
d. Any company in any industry.
e. Government only.

2. A system of assigning costs to departments and products on the basis of a variety of activities instead of only one allocation base is called: (1 point)

a. A responsibility accounting system.
b. A cost center accounting system.
c. Controllable costing.
d. Activity-based costing.
e. Performance costing.

3.A factor that causes the cost of an activity to go up or down is a(n): (1 point)

a. Direct factor.
b. Indirect factor.
c. Cost driver.
d. Product cost.
e. Contribution factor.

4. An activity-based cost allocation system: (1 point)

a. Is one form of a direct or variable costing system.
b. Does not provide total unit cost data.
c. Traces costs to products on the basis of activities performed on them.
d. Does not provide for the allocation of any cost to products that cannot be directly attributable to those products.
e. Does not involve the level of detail and the number of allocations that companies make with traditional allocation methods.

5.A basis for allocating the cost of a resource to an activity cost pool or allocating the cost of an activity cost pool to a cost object is a(n): (1 point)

a. Direct factor.
b. Indirect factor.
c. Cost driver.
d. Joint cost.
e. Opportunity cost.

6.If a firm uses activity-based costing to allocate costs, it must: (1 point)

a. Combine costs in appropriate pools.
b. Select appropriate cost drivers.
c. Calculate an appropriate rate for each pool.
d. Assign overhead based on predetermined rates for cost pools.
e. Perform All of these steps.

7.A college uses advisors who work with all students in all divisions of the college. The most useful allocation basis for the salaries of these employees would likely be (1 point)

a. number of classes run in each division
b. student graduation rate
c. square footage of each division
d. number of students advised from each division
e. relative salaries of division heads