alleryStart learning →In ABC, resources are first assigned to which item?
- Activities
- Customers
- Products
- Departments
Show answer and solution
Correct answer: A. Activities
Resources flow to activities first, and activities then flow to cost objects.
CA Final Activity-Based Costing and Management — practice questions
Explore 70 free Activity-Based Costing and Management questions in CA Final Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.
Practise Activity-Based Costing and Management with Quill →Activity-Based Costing and Management questions and exercises with answers
Showing questions 1–30 of 70.
In ABC, resources are first assigned to which item?Read the answer and worked solution →What does ABC use to attach activity costs to outputs?Read the answer and worked solution →Compared with conventional costing, ABC turns more of which cost into directly assigned cost?Read the answer and worked solution →Who first clearly defined ABC in 1987?Read the answer and worked solution →The overhead assigned to one activity forms its what?Read the answer and worked solution →Before ABC, how did accountants usually spread indirect cost?Read the answer and worked solution →As overheads grew, why did broad-rate costing mislead managers?Read the answer and worked solution →Flat on-cost rates risk what between products sharing common costs?Read the answer and worked solution →How does ABC choose which cost goes to which product?Read the answer and worked solution →Greater automation raises which indirect cost while cutting labour?Read the answer and worked solution →Per Drucker, ABC also records which cost that old systems miss?Read the answer and worked solution →Taylor's 1911 practices behind ABC led to which studies?Read the answer and worked solution →Cooper and Kaplan publicised ABC from 1988 in which journal?Read the answer and worked solution →ABC concepts were developed in manufacturing in which country?Read the answer and worked solution →Lean accounting offers an option to which costly method?Read the answer and worked solution →In theory of constraints terms, finding ABC cost drivers resembles what?Read the answer and worked solution →For bank tellers, which cost driver spreads cost across products?Read the answer and worked solution →A plant's machinery activity is most likely driven by which measure?Read the answer and worked solution →Which cost stays unassigned in ABC as 'business sustaining'?Read the answer and worked solution →A known criticism of ABC is that it does what to fixed cost?Read the answer and worked solution →Dropping a product that looks loss-making after allocation may do what?Read the answer and worked solution →How should costs untraceable to any activity be treated in ABC?Read the answer and worked solution →What mainly limits ABC use in services and administration?Read the answer and worked solution →Which is the first listed step when implementing ABC?Read the answer and worked solution →In the 1990s, ABC lost ground to which Kaplan tool?Read the answer and worked solution →ABM uses ABC data for value chain analysis or what else?Read the answer and worked solution →How do Kaplan and Cooper describe operational ABM?Read the answer and worked solution →Which ABM type decides which products to develop?Read the answer and worked solution →Operational ABM treats non-value-adding activities how?Read the answer and worked solution →Strategic ABM supports which analysis of the best buyers?Read the answer and worked solution →
Worked practice questions
What does ABC use to attach activity costs to outputs?
- Cost drivers
- Standard hours
- Cost pools
- Sales value
Show answer and solution
Correct answer: A. Cost drivers
Cost drivers measure how much of an activity each output consumes, so they carry activity cost to it.
Compared with conventional costing, ABC turns more of which cost into directly assigned cost?
- Overhead
- Raw material
- Direct wages
- Sales revenue
Show answer and solution
Correct answer: A. Overhead
ABC traces indirect cost, that is overhead, to products through activities.
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