MANAGEMENT CONTROL SYSTEMS-EXAM 2 2025 QUESTIONS WITH ANSWERS VERIFIED BY EXPERTS

MANAGEMENT CONTROL SYSTEMS-
EXAM 2 2025 QUESTIONS WITH
ANSWERS VERIFIED BY EXPERTS
Volume-based costing is also called ____-based costing - CORRECT ANSWER>>>>throughput

The steps in stage one of ABC costing are ______.
-computation of pool rate
-identification of cost pools
-assignment of costs to appropriate cost pool
-computation of product cost per unit for each product line
-computation of total activity cost for each product line - CORRECT
ANSWER>>>>identification of cost pools
assignment of costs to appropriate cost pool

The first stage in an ABC system is to ______. - CORRECT ANSWER>>>>identify significant
activities and assign overhead costs to each activity

An activity that must be done for each item produced is a(n) ____-____ activity - CORRECT
ANSWER>>>>unit-level

Engineering design cost is an example of a(n) ______ level activity. - CORRECT
ANSWER>>>>product-sustaining

Labor-hour-based product-costing systems where labor hour are related closely to the factory
volume are also called ______-costing systems. - CORRECT ANSWER>>>>throughput-based
volume-based

Costs such as heating and cooling, property taxes, and insurance on the factory are examples of
______. - CORRECT ANSWER>>>>facility-level activities

Identification of activity cost pools occurs in stage ____ of ABC costing - CORRECT
ANSWER>>>>one

The classification of activities into levels is called a(n) ____ ____ - CORRECT
ANSWER>>>>cost hierarchy

The second stage in an ABC system is to ______. - CORRECT ANSWER>>>>identify the cost
driver for each activity cost pool

The steps in stage two of ABC costing are ______.
-assignment of overhead costs to appropriate cost pools
-identification of activity cost pools
-computation of total unit activity cost for each product line

, -identification of cost drivers for each activity cost pool - CORRECT
ANSWER>>>>identification of cost drivers for each activity cost pool
computation of total unit activity cost for each product line

An activity that must be done for each item produced is a(n) __-level activity. - CORRECT
ANSWER>>>>unit

The cost per unit of the cost driver for a particular activity cost pool is called the ____ _____ -
CORRECT ANSWER>>>>pool rate

Activities that are necessary to support entire product lines, but are not performed every time a
new unit or batch is produced are ____-____ level activities - CORRECT
ANSWER>>>>product-sustaining

To calculate total unit cost in an activity-based system requires ______.
-direct labor per unit
-total direct labor
-overhead activity cost per unit
-direct materials per unit
-total direct materials - CORRECT ANSWER>>>>direct materials per unit
overhead activity cost per unit
direct labor per unit

Activities required in order for the entire production process to occur are referred to as ____-
level activities - CORRECT ANSWER>>>>facility

With a traditional volume-based costing system, there is a tendency to undercost ______. -
CORRECT ANSWER>>>>low-volume, complex

True or false: The classification of activities into unit-level, batch-level, product-sustaining-level,
and facility-level activities is called activity-based costing. - CORRECT ANSWER>>>>False

Traditional product-costing systems may not work well when a company ______.
-only does large production runs
-manufactures a diverse set of products
-has high direct labor and direct material and very low overhead costs
-relies only on unit-based costs drivers - CORRECT ANSWER>>>>manufactures a diverse set
of products
relies only on unit-based costs drivers

Identification of cost drivers for each activity cost pool occurs in stage ____ of ABC costing -
CORRECT ANSWER>>>>two

Costs of setting up machinery for a new production run ______. - CORRECT ANSWER>>>>is
a batch-level activity