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

Activity based costing (ABC) — practice question

Source B1: F Limited is intending to launch two new products, Product X and Product Y.
(a)[11]

Prepare a statement to determine the suggested selling price per unit for both Product X and Product Y as worked out by Abdul.

(b)[9]

Prepare a statement to determine the suggested selling price per unit for both Product X and Product Y as worked out by Brian.

(c)[4]

Explain to the directors how the selling price should be set. Support your answer with reference to your calculations in parts (a) and (b) and any other relevant factors.

(d)[1]

State one reason why selling and distribution costs are excluded from a valuation of inventory that is suitable for inclusion in a statement of financial position.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI