1. Which of the following problems of traditional costing approaches are typically revealed by switching to Activity-Based Costing?
Over-costing of low-volume, high-complexity products
Under-costing of high-volume, low-complexity products
Over-producing unprofitable products
Under-producing profitable products
C and D only
2. Catano Corporation pays for 40% of its raw materials purchases in the month of purchase and 60% in the following month. If the budgeted cost of raw materials purchases in July is $256,550 and in August is $278,050, then in August the Accounts Payable ending balance for raw materials purchases is closest to:
$265,150
$153,930
$166,830
$111,220