19.

An activity-based costing system that is designed for internal decision-making generally will not
conform to generally accepted accounting principles. Which of the following is NOT a reason for
this happening?

A) Some manufacturing costs (i.e., the costs of idle capacity and organization-sustaining
costs) will not be assigned to products.

B) Some nonmanufacturing costs are assigned to products.

C) Allocation bases other than direct labor-hours, direct labor cost, and machine-hours are
used.

D) First-stage allocations may be based on subjective interview data.

Ans:  C

20. Providing the power required to run production equipment is an example of a:

A) Unit-level activity.

B) Batch-level activity.

C) Product-level activity.

D) Organization-sustaining activity.

Ans:  A

21. Parts administration is an example of a:

A) Unit-level activity.

B) Batch-level activity.

C) Product-level activity.

D) Organization-sustaining.

Ans:  C