Activity-Based Costing (ABC)
With this overview in mind please answer the following questions (answers are below):
1. A Traditional costing model might entail which of the following aspects?
- A. An embroidered recognition of achievement affixed to a plaque
- B. The accounting practice of basing costs on machine usage per hour
Answers
- 1. B.
- 2. D.
- 3. A and D.
- 4. B.
- C. Conventional wisdom with regard to inventory depreciation methods
- D. Wages established by regional standards for a five year period
2. A company which routinely adjusts factory procedures to pursue impromptu opportunities might benefit from which of the following accounting models?
- A. Lone Wolfย Accounting Software
- B. Senate sub-committee accounting principles
- C. Labor Department pay rate guidelines
- D. Activity-based accounting model
3. How might the possession of the most accurate production costs benefit a company?
- A. Allow the sales team more certainty in marketing and promotion materials.
- B. Encourage competitors to utilize prison labor.
- C. Remove accounting method sanctions
- D. Facilitate project bids based on more accurate cost estimates
4. Which of the following might be a negative outcome resulting from utilizing the Traditional costing model?
- A. Negative Citing by the Basic Register of Illegal Activities
- B. Increased production without corresponding increased profits
- C. Increased incidence of basic occurrences
- D. Revocation of membership to Activity Based Council
