Accounting 2 Help: 1.What is true concerning an ABC philosophy? a. Costs should

Question

Accounting 2 Help:

1.What is true concerning an ABC philosophy?

a. Costs should be applied using one activity level for simplicity.

b. Each overhead cost should respond proportionally to changes in the activity level of its cost driver.

c. One best cost driver should be selected.

d. No work in process inventories should be used.

2. The total units accounted for equals units in

a. beginning work in process – units transferred out.
b. beginning work in process + ending work in process.
c. ending work in process + units transferred out.
d. ending work in process – units started into production.

3. Cost of goods sold

a. only appears on merchandising companies' income statements.
b. only appears on manufacturing companies' income statements.
c. appears on both manufacturing and merchandising companies' income statements.
d. is calculated exactly the same for merchandising and manufacturing companies.

4.

       more attractive the investment.
       less attractive the investment.
       higher the cost of capital.
       higher the hurdle rate.

Explanation / Answer

1. (A) Costs should be applied using one activity level for simplicity.

2. (D) ending work in process- units started into production.

3. (C) appears on both manufacturing & merchandising companies income statement

4. (A) more attractive the investment.

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