Quelpr
14 marksActivity-Based Costing (ABC)

CAPE Accounting Unit 2 · 2016 · Paper 2 · Question 2(a)(ii)

Brown, Smith and Williams Law Firm provides overhead costs and cost driver quantities for four activities, along with direct and indirect cost details for client Hope McKay.

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 1/3% on the legal bill.

This question uses a figure or table from the paper — you'll see it when you practise.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 2(a)(i)Compute the activity rate for EACH activity in the law firm.[8 marks]
  2. 2(b)Briefly outline the FIVE steps involved in preparing the process costing worksheet.[5 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]

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