Absorption costing: past paper questions
Real questions on absorption costing
The newest 20 of 70 written questions. Open one to see it on the real paper.
- 9706/21 · October/November 2025 · Q4a[4]
Calculate, to two decimal places, the overheads to be absorbed by one unit of each product using the direct labour hour method. Wye Zed
See it on the paper → - 9706/21 · October/November 2025 · Q4b[2]
Calculate the total amount of overheads absorbed by each product if budgets are met. Wye Zed
See it on the paper → - 9706/21 · October/November 2025 · Q4c[2]
State two reasons why overheads may be under-absorbed. Additional information A customer has ordered 1200 units of product Zed for delivery in January 2026. The following additional information is available about product Zed. • One unit of product Zed requires direct materials costing $7. • The direct labour rate is $1...
See it on the paper → - 9706/21 · October/November 2025 · Q4d[5]
Calculate the total selling price for the order. Additional information B Limited manufactures a single type of product at a second factory where marginal costing is used. The following budgeted information is available. per unit selling price $108 direct materials 2.5 kg at $15.50 per kg direct labour 1.5 hours at $12...
See it on the paper → - 9706/21 · October/November 2025 · Q4e[4]
Calculate the current profit per month. Additional information The directors have contacted an overseas supplier of direct materials. • The materials will cost $20 per kg, which includes carriage charges. • The supplier will make one delivery of direct materials each month. The overseas supplier is prepared to supply s...
See it on the paper → - 9706/21 · October/November 2025 · Q4f[6]
Prepare a marginal costing statement for one month if the directors use the overseas supplier.
See it on the paper → - 9706/22 · October/November 2025 · Q4a[2]
Identify two features of absorption costing. Additional information The following information is available for September 2024. Quantity produced 3200 units Quantity sold 2800 units Selling price per unit $84 Contribution per unit $28 Fixed overheads per month $52 000 There was no inventory on 1 September 2024.
See it on the paper → - 9706/22 · October/November 2025 · Q4b[6]
Prepare an absorption costing statement to show the profit for September 2024. Additional information Using marginal costing, the profit for September has been calculated as $26 400.
See it on the paper → - 9706/32 · October/November 2024 · Q1a(i)[6]
the manufacturing account
See it on the paper → - 9706/22 · May/June 2024 · Q4a[4]
Explain two uses of absorption costing. Additional information D Limited uses marginal costing. At one of its factories a single type of product is made. The following budgeted information is available. Per unit $ Selling price 92 Direct materials 33 Direct labour 39 Fixed costs 8 The factory has a budgeted capacity of...
See it on the paper → - 9706/23 · May/June 2024 · Q4a(i)[2]
Allocation
See it on the paper → - 9706/23 · May/June 2024 · Q4a(ii)[2]
Apportionment The factory has two production departments: preparation and finishing. There are two service departments: stores and canteen. Some overheads have already been allocated to departments. The following budgeted overheads for the year ended 31 March 2024 have yet to be apportioned. Electricity Rent $ 63 000 4...
See it on the paper → - 9706/23 · May/June 2024 · Q4b[6]
Complete the table to show the apportionment of the budgeted overheads for the year ended 31 March 2024. Production departments Service departments Total Preparation Finishing Stores Canteen $ $ $ $ $ Overheads allocated 272 120 184 100 60 800 10 960 16 260 Electricity 63 000 Rent 44 000 Total overheads 379 120 Apporti...
See it on the paper → - 9706/23 · May/June 2024 · Q4c[4]
Calculate, to two decimal places, the overhead absorption rate for each production department for the year ended 31 March 2024. , Additional information For the year ended 31 March 2024, actual hours for the preparation department were: Machine hours Labour hours 16 920 16 350 Total actual overheads were the s...
See it on the paper → - 9706/23 · May/June 2024 · Q4d[3]
Calculate the over absorption or under absorption of overheads for the preparation department for the year ended 31 March 2024. Direct materials $800 Direct labour Preparation department 52 hours at $12.20 per hour Finishing department 90 hours at $14.50 per hour Machine hours Preparation department 140 hours Finishing...
See it on the paper → - 9706/23 · May/June 2024 · Q4e[6]
Calculate the selling price for the order. , Additional information It has been suggested that the company would benefit if it switched to a just in time (JIT) method of inventory control.
See it on the paper → - 9706/31 · May/June 2024 · Q1b[8]
Prepare the manufacturing account for the year ended 31 December 2023.
See it on the paper → - 9706/22 · February/March 2024 · Q4b[4]
Calculate the over-absorption or under-absorption of overheads for each production department for the year ended 31 December 2023. Additional information K Limited uses marginal costing at another factory where a single type of product is made. The following budgeted information is available. $ per unit Selling price 4...
See it on the paper → - 9706/32 · February/March 2024 · Q3a[5]
Prepare the manufacturing account for the year ended 31 December 2023. Additional information The profit for the year before office expenses and depreciation of office equipment amounted to $289 800.
See it on the paper → - 9706/32 · February/March 2024 · Q3b(ii)[5]
manufacturing.
See it on the paper →
What examiners said
Candidates were required to prepare a profit statement using absorption costing. This question was not well answered with many candidates not demonstrating their understanding of this type of statement where there was a need to calculate a closing inventory for the first month and to record the under-absorption of overheads.
— Examiner report, October/November 2023, 9706/21 Q4(a) (Cambridge)
Candidates were required to state two possible causes of over absorption of overheads. Candidates who understood the requirement of the task were able to achieve full marks in this question with two valid responses.
— Examiner report, October/November 2023, 9706/21 Q4(e) (Cambridge)
Candidates were required to explain one difference between a cost centre and a cost unit. While the majority were able to explain what a cost centre was there were fewer who were able to explain what a cost unit was.
— Examiner report, October/November 2023, 9706/21 Q4(f) (Cambridge)
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