To effectively use the ABC system, a company must first identify:Question 5Answera.Overheads absorption baseb.Activities in the company that creates costsc.Cost driversd.Costs pools

If a company is considered a service entity and using the ABC method, such as a law office, the ____________would only contain costs to provide the service and would exclude period costs.Select answer from the options belowCost of Salescosting systemdirect materialsMOH

Activity-based costing (ABC) is a two-stage cost allocation system that first assigns costs to activities and then to products based on each product’s use of the activities.Group startsTrue or FalseTrue, unselectedFalse, unselected

Allure Company manufactures and distributes two products, M and XY. Overhead costs are currently allocated using the number of units produced as the allocation base. The controller has recommended changing to an activity-based costing (ABC) system. She has collected the following information:Activity Cost Driver Amount M XYProduction setups Number of setups $ 72,000 12 28Material handling Number of parts 50,000 54 36Packaging costs Number of units 355,000 108,000 72,000    $ 477,000    What is the total overhead per unit allocated to Product XY using activity-based costing (ABC)?Note: Do not round intermediate calculations; round your final answer to the nearest cent.Multiple Choice$2.95$2.65$1.69$2.45

The total cost per unit of MOH allocated to each product will be _________________when using traditional costing or ABC.Select answer from the options belowthe same or differentthe sameundetermineddifferent

A primary benefit of Activity-based costing (ABC) is that it helps to establish a more accurate cost for each unit of product or service. Another benefit would be that, __________________.           a.        the expense of obtaining the cost data required by the system is very minimal.           b.        all the required data can be easily generated internally within a business’s financial accounting system.           c.        it makes managers more aware of their responsibility to control the activities that generate costs.           d.        it provides relevant information for decision making when the products produced are very similar.