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2 marksActivity-Based Costing (ABC)

CAPE Accounting Unit 2 · 2010 · Paper 2 · Question 2(b)(i)

Describe the MAIN difference between traditional costing systems and activity-based costing systems.

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  1. 2(a)(i)Calculate the total shop overhead applied to jobs in August.[2 marks]
  2. 2(a)(ii)Determine by how much shop overhead was over- or under-applied during August.[3 marks]
  3. 2(a)(iii)Compute the cost of the completed jobs (Jobs 811, 813, and 814) for the month.[10 marks]
  4. 2(a)(iv)Compute the total cost of jobs in process on August 31.[4 marks]
  5. 2(b)(ii)a)Compute the activity application rate for EACH activity centre for 2009.[4 marks]
  6. 2(b)(ii)b)Compute the total overhead cost assigned to EACH product in 2009 using activity-based costing.[4 marks]
  7. 2(b)(ii)c)Compute the total cost to manufacture ONE unit of EACH product in 2009 using activity-based costing.[2 marks]
  8. 2(b)(ii)d)Based on your previous calculations, explain why the company's profitability has been declining since the introduction of the premium product.[4 marks]

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