A Difference in Quantity of Materials Used on Two Comparable

question 69

Multiple Choice

A difference in quantity of materials used on two comparable jobs may be caused by

• A)inadequately trained employees
• B)poor quality materials
• C)incorrect instructions attached to the job
• D)all of these choices

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Definitions:

Activity Cost Pools

A method in cost accounting where costs are accumulated according to activities performed, facilitating more accurate product or service costing.

Activity-based Costing System

A method of allocating costs to products or services based on the activities that go into producing them.

Traditional Cost System

A cost accounting system that allocates overhead costs to products based on a predetermined rate, often using direct labor hours or machine hours as the allocation base.

Activity-based Costing

An accounting approach which attributes overheads and indirect costs to specific activities related to production, offering more precise cost information.