Which two of the following costs are likely to rise when jus-职上题库

Which two of the following statements about activity based costing are true?

A

Implementation of ABC is unlikely to be cost effective when variable production costs are a low proportion of total production costs.

B

In a system of ABC, for costs that vary with production levels, the most suitable cost driver is likely to be direct labour hours or machine hours.

C

Activity based costs are the same as relevant costs for the purpose of short-run decision making.

D

Activity based costing is a form of absorption costing.

Which two of the following statements about activity based costing are true?

A

ABC recognises the complexity of modern manufacturing by the use of multiple cost drivers

B

ABC establishes separate cost pools for support activities

C

ABC reapportions support activity costs

D

BC is an appropriate costing system when overheads vary with time spent on production

ABC is felt to give a more useful product cost than classic absorption costing (with overheads absorbed on labour hours) if which of the following two apply?

A

Labour costs are a relatively minor proportion of total costs

B

Overheads vary with many different measures of activity

C

Overheads are difficult to predict

D

Cost drivers are difficult to identify

Which two of the following costs are likely to rise when just in time (JIT) manufacturing is introduced?

A

Set-up costs

B

Raw material handling costs

C

Raw material storage costs

D

Customer order costs

Which of the following statements about target costing is not true?

A

Target costing is better suited to assembly orientated industries than service industries that have a large fixed cost base.

B

Costs may be reduced in target costing by removing product features that do not add value.

C

A target cost gap is the difference between the target cost for a product and its projected cost.

D

Products should be discontinued if there is a target cost gap.

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