$5,344 

$5,364 

$6,900 

$6,964 

2. Question : Which of the following items would be classified as a volume-level cost in an activity-based cost management (ABM) system?

Student Answer:

indirect materials 

production supervisor's salary 

depreciation on factory building 

research and development 

Student Answer:

$38,000. 

$47,900. 

$27,230. 

$36,230. 

Student Answer:

17,500. 

16,500. 

15,000. 

13,000. 

5. Question : Which of the following service department cost allocation 

methods is most widely used by manufacturing companies?

Student Answer:

reciprocal method 

direct method 

step method 

6. Question : The controllability concept states that managers should be held 

responsible for

Student Answer:

all items over which they have decision-making authority. 

costs and revenues, but not investments in assets used in 

their division. 

only items that are allocated to their divisions on a per-unit 

basis. 

fixed compensation items, but not contingent compensation 

items 

7. Question : Which of the following service departments would use space 

occupied (square footage) to allocate its costs to user 

departments?

Student Answer:

Material Handling 

Cafeteria 

Custodial Services 

Cost Accounting 

Engineering 

8. Question : Which of the following activities is most likely to be classified as 

value-added for a manufacturing company?

Student Answer:

storing 

ordering 

inspecting 

assembling 

9. Question : Which of the following is not a characteristic of a decentralized 

organization?

Student Answer:

better use of local knowledge 

better use of top management's time 

reduced response time to environmental changes 

more decisions made by relatively few individuals 

10. Question : Which of the following items would be classified as a batch-level

cost in an activity-based cost management (ABM) system?

Student Answer:

indirect labor 

production supervisor's salary 

depreciation on factory building 

machinery set-up costs