Which of the following is most likely to be true of the manufacturing overhead costs assigned to a productwith relatively low volume and high complexity?O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume-based system.O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABCsystem.O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-basedsystem.O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-basedsystem will not.e to searchW11:35A D A dx ENG22-05-2021hp141brt sedeletehomeend96- backspacenumasklockT7V8A94homeDg upKenter5 0pause↑ shift11endaltctrlSUt

Activity based costing is the costing method that shows the assignment of overhead cost and indirect…

Answered: Which of the following is most likely…

Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product with relatively low volume and high complexity?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 12MC: Which statement is correct? A. Activity-based cost systems are less costly than traditional cost...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Which of the following is most likely to be true of the manufacturing overhead costs assigned to a product
with relatively low volume and high complexity?
O a. An ABC system will assign the same manufacturing overhead costs to the product as a volume-
based system.
O b. Avolume-based system will assign more manufacturing overhead costs to the product than an ABC
system.
O c. An ABC system will assign more manufacturing overhead costs to the product than a volume-based
system.
O d. An ABC system will assign manufacturing overhead costs to the product, while a volume-based
system will not.
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Activity-based costing is preferable in a system: when multiple products have similar product volumes and costs with a large direct labor cost as a percentage of the total product cost with multiple, diverse products where management needs to support an increase in sales price
Which statement is correct? A. Activity-based cost systems are less costly than traditional cost systems. B. Activity-based cost systems are easier to implement than traditional cost systems. C. Activity-based cost systems are more accurate than traditional cost systems. D. Activity-based cost systems provide the same data as traditional cost systems.
Why are support department costs difficult to apply to products?
Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
When operating in a constrained environment, which products should be produced? A. products with the highest contribution margin per unit B. products with the highest contribution margin per unit of the constrained process C. products with the highest selling price D. products with the lowest allocated joint cost
Which is not a step in analyzing the cost driver for manufacturing overhead? A. Identify the cost B. identify non-value-added costs C. analyze the effect on manufacturing overhead D. identify the correlation between the potential driver and manufacturing overhead
Which costing system would be more efficient when direct materials and direct labor costs are high, and overhead costs are low?
Which of the following is false about activity-based costing? Implementing an activity-based costing system is more costly than implementing a traditional cost allocation system. In ABC, the assumption is that activities use resources or cause costs. An activity-based costing system relies only on volume measures such as direct labor hours to allocate all overhead costs to products. A traditional cost allocation system and an activity-based costing system are used to estimate the profitability of products.
If Power Products uses process costing, which of the follow-ing are likely to be true: a. The production processes are high volume.b. The products use different amounts of direct labor.c. The products are created with repetitive processes.d. The products are created to customer specifications.
Which of the following best defines standard costing? a. It is the same as actual costing but done in real time. b. It is a system that allocates overhead costs on the basis of standard overhead rates times the actual quantities of the allocation base used. c. It is a system that traces direct costs to output produced by multiplying the standard prices or rates by the standard quantities of inputs allowed for the actual output produced. d. It is a system that traces direct cost to output by multiplying actual prices or rates by actual quantities of inputs and allocates overhead costs on the basis of actual quantities of the allocation base used.
Which of the following statements is false? (You may select more than one answer.)a. Activity-based costing systems usually shift costs from low-volume products tohigh-volume products.b. Benchmarking can be used to identify activities with the greatest potential forimprovement.c. Activity-based costing is most valuable to companies that manufacture products thatare similar in terms of their volume of production, batch size, and complexity.d. Activity-based costing systems are based on the assumption that the costs included ineach activity cost pool are strictly proportional to the cost pool’s activity measure.
Which among the following is not true about traditional costing system? a. This method allocates greater proportion of overheads to high volume products b. This method avoids the phenomenon of product cost cross subsidization c. This method allocates smaller proportion of overheads to low volume products d. This method leads to cost smoothing