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4 marksActivity-Based Costing (ABC)

CAPE Accounting Unit 2 · 2021 · Paper 2 · Question 2(c)(ii)

A confectionery company manufactures three chocolate varieties (decadent, smooth, monumental) in batches of 1,000 units.

Determine the activity cost driver rate for set-up costs and inspection costs.

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Other parts of this question

  1. 2(a)Explain EACH of the following costing methods, giving ONE example of a type of business that may use each method: • Job-order costing • Process costing[6 marks]
  2. 2(b)(i)Calculate the predetermined overhead rate used by Phillips Electrical.[2 marks]
  3. 2(b)(ii)Calculate the total cost of the ending work-in-process inventory for both February and March.[4 marks]
  4. 2(b)(iii)Calculate the total prime cost incurred during the month of March.[2 marks]
  5. 2(b)(iv)Calculate the cost of goods manufactured for March.[3 marks]
  6. 2(c)(i)Calculate the cost per unit of EACH of the following chocolate varieties, using the traditional costing system: • Decadent • Monumental[2 marks]
  7. 2(c)(iii)For the smooth chocolate variety, compute the estimated overhead cost per unit using the activity-based costing system.[8 marks]
  8. 2(d)(i)Complete the sentence: 'Absorption costing income will equal variable costing income if ..........'[1 mark]
  9. 2(d)(ii)Complete the sentence: 'Absorption costing, expenses all of the current period fixed overhead costs, as well as, ..........'[1 mark]
  10. 2(d)(iii)Complete the sentence: 'Absorption costing income will be greater than variable costing income if ..........'[1 mark]
  11. 2(d)(iv)Complete the sentence: 'The total amount of fixed overhead cost is expensed as ..........'[1 mark]

More practice: the rest of this paper · more Activity-Based Costing (ABC) questions · all CAPE Accounting Unit 2 past papers