Activity Based Costing (ABC) – Corporate and Management Accounting MCQ


Activity Based Costing (ABC) – Corporate and Management Accounting MCQ

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: In ABC System, the allocation basis that is used for applying costs to services or procedures are called:

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: ABC emphasizes on:

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encourages managers to identify which activities are value-added activities.

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Dec 2018: Level Activities are identified in traditional Absorption Costing.

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Costs that are caused by a group of things being made or processed at a single time are referred to as:

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June 2018: The division of activities into the unit level, batch level, product level, and facility-level categories is commonly known as a:

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: Performing periodic maintenance on buildings and general use equipment is an example of:

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Which of the following statement is not true in respect of Activity-based costing?

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Dec 2017: Fast Ltd., manufactures three types of products A, B, and C following ABC System. During a period the company incurred ₹ 73,000 as inspection cost and it was worked for 10, 20 and 9 production runs respectively for producing products A, B, and C. The inspection costs for product B under the ABC system was:

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Assertion (A):Implementation of the ABC System requires substantial resources which are costly to maintain.
Reason (R):

Activity-Based Costing is a two-stage product costing.


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Dec 2017: An Activity-Based Costing, an inspection of the product is a level activity.

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Dec 2017: The main reason for the usage of Activity Based Costing, by replacing the traditional costing system is that:

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:In Traditional absorption costing system cost are first traced to:

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A homogeneous cost pool is one that ___

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Assertion (A)Activity-based costing is not normally used for external reporting purposes.
Reason (R)Activity-based costing does not conform to generally accepted principles.Select the correct answer from the options given below:

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Which of the following is the main cost driver of customer order processing activity —

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What is the proper sequence of events in an ‘activity based costing’ system —(i) Calculation of overheads application rates.(ii) Identification of cost drivers(iii) Identification of cost pools(iv) Assignment of overheads cost to products.

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The key area(s) of activity-based costing is/are___

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Dec 2015: The basis of apportionment of overheads which takes into account the profitability of various departments is called___

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June 2015: According to the Chartered Institute of Management Accountants (CIMA), cost attribution to cost units on the basis of benefits received from indirect activities e.g. ordering, setting¬up, assuring quality is known as___

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Under activity-based costing, ‘material ordering’ is considered as —

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June 2015: In activity-based costing, an item for which cost measurement is required is called —

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In activity-based costing, the allocation basis used for applying costs to services or products is called—

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: Which of the following is not included in batch level activities___

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Cost attribution to cost units on the basis of benefit received from indirect activities, such as ordering, setting-up, assuring quality is known as:

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