1. A basic assumption of activity based costing is that
a-all mfg costs vary directly with units
b-products or services require the performance of activities and activities consume resources
c-only costs that respond to unit level drivers are product costs
d-only variable costs are included in activity cost pools
2. In an activity based costing system, what should be used to assign a departments mfg OH costs to products produced in varying lot sizes?
a-a single cause and effect relationship
b-multiple cause and effect relationships
c-relative net sales values of the products
d-a products ability to bear cost allocation
3. A difference between standard costs used for cost control and budgeted costs
a-can exist because standard costs must be determined after the budget is complexed
b-can exist because standard costs represent what costs should be, whereas budgeted costs represent expected actual costs
c-can exist because budgeted costs are historical costs, whereas standard costs are based on engineering studies
d-cannot exist because they should be the same amounts
