Accounting 9706 · AS & A Level · Activity based costing (ABC)

Activity based costing (ABC) — practice question

Refer to Source B2 in the Insert.
(a)[5]

Calculate the total production cost and the unit cost for each product from the data provided.

(b)[2]

Calculate the unit selling price for each product from the figures given.

(c)[1]

Define the term cost driver.

(d)[3]

State three benefits of adopting ABC.

(e)[5]

Calculate the total production cost and unit cost for each product if ABC is used.

(f)[2]

Calculate the unit selling price for each product if ABC is used.

(g)[3]

Explain the difference in total production cost for each product with reference to (a) and (e).

(h)[4]

Explain why V Limited would find ABC helpful in 2020 but not in 2021.

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