This quiz works best with JavaScript enabled. Home > Finance > Accounting > Management Accounting > Activity Based Management > Activity Based Management – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Activity Based Management Quiz 1 (15 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Activity-based costing: A) Uses a plant-wide overhead rate to assign overhead. B) Is not expensive to implement. C) Typically applies overhead costs using direct labor-hours. D) Uses multiple activity rates. Show Answer Correct Answer: D) Uses multiple activity rates. 2. It is known that the actual number of hours of rework for damaged goods is 5 hours. Standard labor cost $ 15/hour. What non-value added costs were incurred? A) $ 65. B) $ 85. C) $ 75. D) $ 55. Show Answer Correct Answer: C) $ 75. 3. Inspections are an example of which activity-level group? A) Unit-level activity. B) Facility-level activity. C) Product-level activity. D) Batch-level activity. Show Answer Correct Answer: D) Batch-level activity. 4. ABM consists of two dimensions viz A) Cost and time dimensions. B) Cost and activity dimensions. C) Cost and process dimensions. D) Process and activity dimensions. Show Answer Correct Answer: C) Cost and process dimensions. 5. Property taxes and insurance are which category of cost? A) Facility-level. B) Product-level. C) Unit-level. D) Batch-level. Show Answer Correct Answer: A) Facility-level. 6. Below are non value added activities (non value added activities) ..... A) Warehousing. B) Delivery. C) Cutting. D) Payment. Show Answer Correct Answer: A) Warehousing. 7. How is product margin computed? A) Sales-Fixed Costs. B) Sales-Variable Costs. C) Sales-Selling & Admin Expenses. D) Sales-Product Costs. Show Answer Correct Answer: D) Sales-Product Costs. 8. Below are not drivers of value added activities, except ..... A) Rework time. B) Transfer time. C) Number of inspections. D) Processing time. Show Answer Correct Answer: D) Processing time. 9. The various activities needed to stay in business and allow for other activities to be carried out are called ..... A) Support activity. B) Non-value added activities. C) Value added activity. D) Main activity. Show Answer Correct Answer: C) Value added activity. 10. How to compute product margin? A) Sales-Selling & Admin Expenses. B) Sales-Product Costs. C) Sales-Variable Costs. D) Sales-Fixed Costs. Show Answer Correct Answer: B) Sales-Product Costs. 11. Under ABC an event that causes the consumption of overhead resources in an organization called A) Activity Cost pooling. B) Activity. C) Overhead. D) Allocation. Show Answer Correct Answer: B) Activity. 12. Which of the following is NOT an approach to ABC? A) ABC System For Indirect Costs. B) Product Cost Approach. C) Simple Approach. D) Comprehensive System. Show Answer Correct Answer: B) Product Cost Approach. 13. An activity-based costing system is one that: A) Traces costs to activities and then to products. B) Traces costs to resources and then to activities. C) Traces activities to costs and then to resources. D) Traces products to activities and then to resources. Show Answer Correct Answer: A) Traces costs to activities and then to products. 14. The objective of the ABM dimension that is in line with or closest to the ABC function is ..... A) Provide information about activities. B) Reduce costs. C) Improve cost accuracy. D) Measure continuous improvement. Show Answer Correct Answer: C) Improve cost accuracy. 15. Product design is an example of which activity-level group? A) Facility-level activity. B) Batch-level activity. C) Product-level activity. D) Unit-level activity. Show Answer Correct Answer: C) Product-level activity. Related QuizzesManagement Accounting QuizzesAccounting Quizzes 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books