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

Activity based costing (ABC) — practice question

Read Source B1 from the insert.
(a)[6]

Calculate the selling price for one unit.

(b)[12]

Calculate the selling price for one unit of the deluxe version.

(c)[2]

State two concerns the directors might have when fixing the selling price of the deluxe version.

(d)[3]

Advise the directors whether or not they should halve the number of quality inspections taking place. Justify your answer.

(e(i))[1]

State the meaning of the following term: Cost driver.

(e(ii))[1]

State the meaning of the following term: Cost pool.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Total unit cost is $60$

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