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Marginal and Absorption Costing · CAPE Accounting Unit 2

31 past-paper questions on Marginal and Absorption Costing, part of Module 2: Costing Systems, from every CAPE Accounting Unit 2 paper on Quelpr.

Practise Marginal and Absorption Costing
  1. 2(a)(i)4 marks· CAPE Accounting Unit 2 · 2004 · Paper 2Compute the unit product cost under absorption costing and under variable/marginal costing.
  2. 2(a)(ii)10 marks· CAPE Accounting Unit 2 · 2004 · Paper 2Prepare an income statement for the month using the variable/marginal costing method.
  3. 2(a)(iii)10 marks· CAPE Accounting Unit 2 · 2004 · Paper 2Prepare an income statement for the month using the absorption costing method.
  4. 2(b)(i)a)3 marks· CAPE Accounting Unit 2 · 2008 · Paper 2Compute the unit product cost assuming that Eldon Company uses absorption costing.
  5. 2(b)(i)b)2 marks· CAPE Accounting Unit 2 · 2008 · Paper 2Compute the unit product cost assuming that Eldon Company uses variable costing.
  6. 2(b)(ii)5 marks· CAPE Accounting Unit 2 · 2008 · Paper 2Prepare a variable costing income statement for the company.
  7. 2(b)(iii)5 marks· CAPE Accounting Unit 2 · 2008 · Paper 2Prepare an absorption costing income statement for the company.
  8. 2(b)(iv)2 marks· CAPE Accounting Unit 2 · 2008 · Paper 2Reconcile the difference between the net operating income computed under variable costing and that computed under absorption costing.
  9. 2(a)(i)a)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Determine the cost of a single unit of the product under absorption costing.
  10. 2(a)(i)b)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Determine the cost of a single unit of the product under variable costing.
  11. 2(a)(ii)8 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Prepare an Income Statement for August using the contribution format and variable costing.
  12. 2(a)(iii)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Reconcile the variable costing net income figure computed in (a)(ii) and the absorption costing net income figure provided.
  13. 2(a)(iv)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Briefly explain the main difference between variable costing and absorption costing in terms of the treatment of costs in the financial statements.
  14. 2(a)(v)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Indicate the primary purposes for which variable costing and absorption costing are used.
  15. 2(a)(vi)2 marks· CAPE Accounting Unit 2 · 2009 · Paper 2Explain why the variable costing income measurement approach would be attractive to a manager who is interested in projecting her firm's future profit performance.
  16. 2(a)(i)4 marks· CAPE Accounting Unit 2 · 2011 · Paper 2Assuming that Lawson Bravo Company uses an absorption costing system, compute its operating income for the year.
  17. 2(a)(ii)4 marks· CAPE Accounting Unit 2 · 2011 · Paper 2Assuming that Lawson Bravo Company uses a marginal costing system, compute its operating income for the year.
  18. 2(a)(iii)2 marks· CAPE Accounting Unit 2 · 2011 · Paper 2Reconcile the operating income figures computed in parts (a)(i) and (ii) above.
  19. 2(a)(i)7 marks· CAPE Accounting Unit 2 · 2012 · Paper 2Prepare a marginal costing income statement for the company.
  20. 2(a)(ii)7 marks· CAPE Accounting Unit 2 · 2012 · Paper 2Prepare an absorption costing income statement for the company.
  21. 2(a)(iii)2 marks· CAPE Accounting Unit 2 · 2012 · Paper 2Reconcile the difference between the net operating income computed under marginal costing and that computed under absorption costing.
  22. 2(b)(i)8 marks· CAPE Accounting Unit 2 · 2017 · Paper 2Prepare the income statement for 2016 using marginal costing.
  23. 2(b)(ii)10 marks· CAPE Accounting Unit 2 · 2017 · Paper 2Prepare the income statement for 2016 using absorption costing.
  24. 2(c)4 marks· CAPE Accounting Unit 2 · 2017 · Paper 2Explain the difference between 'absorption costing' and 'marginal costing'.
  25. 2(c)(i)9 marks· CAPE Accounting Unit 2 · 2018 · Paper 2Calculate the per unit value of closing inventory using marginal costing.
  26. 2(c)(ii)10 marks· CAPE Accounting Unit 2 · 2018 · Paper 2Prepare the Income Statement for Lasmoy Ltd using absorption costing.
  27. 2(d)(i)1 mark· CAPE Accounting Unit 2 · 2021 · Paper 2Complete the sentence: 'Absorption costing income will equal variable costing income if ..........'
  28. 2(d)(ii)1 mark· CAPE Accounting Unit 2 · 2021 · Paper 2Complete the sentence: 'Absorption costing, expenses all of the current period fixed overhead costs, as well as, ..........'
  29. 2(d)(iii)1 mark· CAPE Accounting Unit 2 · 2021 · Paper 2Complete the sentence: 'Absorption costing income will be greater than variable costing income if ..........'
  30. 2(d)(iv)1 mark· CAPE Accounting Unit 2 · 2021 · Paper 2Complete the sentence: 'The total amount of fixed overhead cost is expensed as ..........'
  31. 2(b)(i)4 marks· CAPE Accounting Unit 2 · 2022 · Paper 2Explain the difference between absorption costing and marginal costing.

Related topics in Module 2: Costing Systems