| 1. | An approach in which the company under-costs it's one product and over-costs at least one product is classified as |
| a. | service-cost across subsidizing |
| b. | product-price cross subsidizing |
| c. | product-cost cross subsidizing |
| d. | product cross subsidizing |
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Answer: (c).product-cost cross subsidizing
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| 2. | The budgeted total cost in indirect cost pool, is divided by budgeted total quantity of the cost allocation base, is calculated by |
| a. | budgeted direct cost rate |
| b. | budgeted indirect cost rate |
| c. | expected indirect cost rate |
| d. | direct budget percentage |
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Answer: (b).budgeted indirect cost rate
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| 3. | In an activity based cost system; an activity/unit of work or task with differentiated purposes will be classified as |
| a. | different task |
| b. | purpose cost |
| c. | an activity |
| d. | an allocation cost |
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Answer: (c).an activity
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| 4. | The costs of all the activities for individual products or services can be called |
| a. | purpose level costs |
| b. | output-unit level costs |
| c. | input-unit level costs |
| d. | activity level costs |
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Answer: (b).output-unit level costs
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| 5. | In an activity based costing implementation, the product's diverse demand is based on |
| a. | batch size |
| b. | complexity |
| c. | process steps |
| d. | all of above |
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Answer: (d).all of above
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