Test bank chapter 5

86. All of the following are low-value-added activities except:

A. Processing.

B. Reworking.

C. Moving.

D. Inspection.

E. Warranty service.

87. Which of the following cost pools are used to classify costs under activity-based costing?

A. Option A

B. Option B

C. Option C

D. Option D

E. Option E

93. Purchase order, set-up, and inspection costs are examples of:

A. Unit-level costs.

B. Batch-level costs.

C. Product-level costs.

D. Facility-level costs.

E. Department-level costs.

94. Which of the following would not be considered a facility-level activity?

A. Providing security for the plant.

B. Factory property taxes and insurance.

C. Closing the books each month.

D. Placing purchase orders.

95. Costs at the unit-level of activity should be allocated to products using cost drivers that are:

A. Customer-oriented.

B. Design-related.

C. Volume-related.

D. Product-related.

E. Order-related.

96. If a costing system uses a single base to allocate overhead costs that are results of several production activities:

A. Products that use relatively more of this base tend to be undercosted.

B. Products that use relatively less of this base tend to be overcosted.

C. Products that use relatively more of this base tend to be overcosted.

D. Products may be over- or under-costed, depending on the activity level.

E. Products may be over- or under-costed, depending on the overhead rate.

97. Procurement costs such as costs of placing orders for materials and paying suppliers are usually classified as:

A. Output-unit-level costs.

B. Batch-level costs.

C. Product-level costs.

D. Facility-level costs.

E. Vendor costs.

98. The cost of sales visits is a:

A. Customer unit-level cost.

B. Customer batch-level cost.

C. Customer-sustaining cost.

D. Distribution-channel cost.

E. Sales-sustaining cost.

99. Freight charges based on number of units shipped to customers is a:

A. Customer unit-level cost.

B. Customer batch-level cost.

C. Customer-sustaining cost.

D. Distribution-channel cost.

E. Sales-level cost.

100.Processing sales returns and allowances is usually classified as a:

A. Customer unit-level cost.

B. Customer batch-level cost.

C. Customer-sustaining cost.

D. Distribution-channel cost.

E. Sales-level cost.