F5 test 1 203

Is the following statement TRUE or FALSE regarding

activity-based costing (ABC) and cost drivers?

"A cost driver is any factor that cause a change in the cost of an activity”

• True

• False

Is the following statement TRUE or FALSE regarding

activity-based costing?

"Life-cycle costing takes into account all costs

incurred in a product like life-cycle with exception of sunk costs incurred on research and development

• True

• False

Is the following statement about target costing TRUE

or FALSE?

"Products should be discontinued if there is a target cost gap“

• True

• False

1. Is the following statement TRUE or FALSE regarding

activity-based costing?

"A cost pool is an activity which consumes resources

and for which overhead costs are identified and

allocated"

• True

• False

Is the following statement TRUE or FALSE regarding

activity-based costing?

"Life-cycle costing ensures a profit is generated over The life of the product'

• True

• False

Is the following statement about target costing TRUE or

FALSE?

"A target cost gap is the difference between the target

cost for a product and its projected cost'

• True

• False

Is the following statement about target costing TRUE or

FALSE?

"Cost may be reduced in target costing by removing

product features that do not add value"

• True

• False

5. Is the following statement about target costing TRUE or

FALSE?

"The high cost of (for ex) research, design and

marketing in the early stages in a product's life-cycle

necessitate a high initial selling price"

• True

• False

Is the following statement about material flow cost

accounting (MFCA) TRUE or FALSE ?

"In MFCA, output costs are allocated between positive

and negative product costs"

• True

• False

Is the following formula to calculate break even point TRUE

or FALSE

Breakeven point in units = Total fixed costs /

Contribution per unit

• True

• False