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

Activity based costing (ABC) — practice question

Read Source B2 from the Insert.
(a)[5]

Calculate the total production cost and the unit cost for each of the products.

(b)[2]

Calculate the selling price per unit for each product.

(c)[1]

Define what is meant by cost driver.

(d)[3]

State three benefits of using ABC.

(e)[5]

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

(f)[2]

Calculate the unit selling price for each product when 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 useful in 2020, but not in 2021.

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