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5 marksProcess Costing

CAPE Accounting Unit 2 · 2016 · Paper 2 · Question 2(b)

A business owner planning to mass produce wooden furniture wants to employ a process costing system to track production costs.

Briefly outline the FIVE steps involved in preparing the process costing worksheet.

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Other parts of this question

  1. 2(a)(i)Compute the activity rate for EACH activity in the law firm.[8 marks]
  2. 2(a)(ii)Compute the legal bill for Hope McKay using the activity-based costing (ABC) method, given the direct costs, indirect cost usage, and a profit margin of 33…[14 marks]
  3. 2(c)(i)Suggest an appropriate cost driver for EACH activity.[4 marks]
  4. 2(c)(ii)State TWO merits and TWO demerits of the ABC system employed by Janet.[4 marks]

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