Question

1) The legal costs associated with filing a patent for a new model of scooter at a toy manufacturer is an example of which type of​ activity?

A. ​Unit-level

B. Batch-level

C. ​Product-level

D. Facility-level

2) Which of the following reasons would indicate that a company should consider using departmental overhead rates rather than using a single plantwide overhead​ rate?

A. Each department spends different amounts on manufacturing overhead.

B. Each department incurs different types of manufacturing overhead.

C. Each product is in each department for a different length of time.

D. All of the above statements are reasons that a company would choose departmental overhead rates rather than using a single plantwide overhead rate.

3) Insurance on a​ company's buildings would most likely be classified as a​ ______________ cost?

A. Batch-level

B. ​Unit-level

C. ​Product-level

D. ​Facility-level

4) The cost of reworking defective products before shipping to customers would be classified as which type of quality​ costs?

A. Prevention cost

B. Appraisal cost

C. Internal failure cost

D. External failure cost

5) Cost distortion is likely to​ cause:

A. Undercosting of all products.

B. Overcosting of all products.

C. Overcosting some products and undercosting other products.

D. Accurate costing of all products.

Answer 1

1.

A) Unit level, it is the level of activities those are performed for each unit produced.

B) Batch-level, Bit is the activities which occur each time a batch is produced.

C)Correct answer. Product-level, Product level activities are activities performed to support the production.

D) Facility-level, which supports production function, and it is difficult to allocate them in reasonable manner to the products.

2.

D) Each department spends different amounts on manufacturing overhead, incurs different types of manufacturing overhead, Each product is in each department for a different length of time are reasons that a company would choose departmental overhead rates rather than using a single plantwide overhead rate.

Plant-wide rate will use when activities of the various departments are homogeneous.

3.

A) Batch-level, Bit is the activities which occur each time a batch is produced.

B) Unit level, it is the level of activities those are performed for each unit produced.

C) Product-level, Product level activities are activities performed to support the production.

D) Facility-level, which supports production function, and it is difficult to allocate them in reasonable manner to the products.

4.

A. Prevention cost, it is the costs incurred in order to prevent a defect from occurring in its primary stage.

B. Appraisal cost, Appraisal costs are the costs incurred to check products and services before delivery in order to determine whether all units of the product or service meet customer needs.

C) Internal failure cost, it is the cost which occurs when a problem is detected before a product’s shipment to the customer.

D. External failure cost, it occurs when a defect is detected after the shipment of the products and the product is already with the consumers.

5.

C) Cost distortion is likely to​ cause overcosting some products and undercosting other products.