Acc 350 Wk 11 Final Exam

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ACC 350 WK 11 Final Exam

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1) 

A top-selling product might actually result in losses for the company. 

Answer:

2) 

Companies that undercost products will most likely lose market share. 

Answer:

3) 

If companies increase market share in a given product line because their reported costs are less than their actual costs, they will become more profitable in the long run. 

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4) 

As product diversity and indirect costs increase, it is usually best to switch away from an activity based cost system to a broad averaging system. 

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5) 

If a company undercosts one of its products, then it will overcost at least one of its other products. 

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6) 

Direct costs plus indirect costs equal total costs. 

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7) 

When refining a costing system, a company should classify as many costs as possible as indirect costs. 

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8) 

In a homogeneous cost pool, all costs have a similar cause-and-effect relationship with the cost-allocation base. 

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9) 

Indirect labor and distribution costs would most likely be in the same activity-cost pool. 

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10) 

Activity-based costing helps identify various activities that explain why costs are incurred. 

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11) 

Direct tracing of costs improves cost accuracy. 

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12) 

A cost-allocation base is a necessary element when using a strategy that will refine a costing system. 

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13) 

An activity-based costing system is necessary for costing services that are similar. 

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14) 

Traditional systems are likely to undercost complex products with lower production volume. 

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15) 

For activity-based cost systems, activity costs are assigned to products in the proportion of the demand they place on activity resources. 

Answer:

16) 

Unit-level measures can distort...