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9 marksActivity-Based Costing (ABC)

CAPE Accounting Unit 2 · 2013 · Paper 2 · Question 2(a)(i)

Bracket Inc. manufactures geometrical dividers (1 500 units) and T-squares (3 000 units) during April, with total overheads of 80 000 across three activities: Material handling (35 000), Machine set ups (30 000), and Quality inspections (15 000). Driver data per product is given in Table 2 and Table 3.

Determine the overhead rate for each of the three activities shown in Table 2.

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Other parts of this question

  1. 2(a)(ii)Assign the manufacturing overhead costs for April to the two products.[6 marks]
  2. 2(a)(iii)Calculate the total assigned overhead costs.[2 marks]
  3. 2(a)(iv)Calculate the overhead cost per unit for each product.[2 marks]
  4. 2(b)State four differences between job order costing and process costing.[8 marks]
  5. 2(c)(i)Identify four types of organizations in which service sector costing can be used.[4 marks]
  6. 2(c)(ii)Outline two difficulties associated with service sector costing.[4 marks]

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