Costing Systems
Indicate whether the following statements are true or false.
1. A traditional costing system assigns overhead by means of multiple overhead rates.
2. Direct materials and direct labor costs are easier to trace to products than overhead.
3. As manufacturing processes have become more automated, more companies have chosen to assign overhead on the basis of direct labor costs.
4. In activity-based costing, an activity is any event, action, transaction, or work sequence that incurs cost when producing goods or performing services.