Activity based costing: past paper questions
Real questions on activity based costing
The newest 20 of 30 written questions. Open one to see it on the real paper.
- 9706/43 · October/November 2025 · Q2b[3]
State three conditions which should be satisfied before a business may adopt ABC.
See it on the paper → - 9706/23 · May/June 2024 · Q4f[7]
Advise the directors whether or not they should switch to a JIT method of inventory control. Justify your answer by considering both financial and non-financial factors.
See it on the paper → - 9706/33 · May/June 2024 · Q1a[4]
Identify the costs that may be included in the inventory cost of work in progress. ,
See it on the paper → - 9706/41 · May/June 2024 · Q1e[2]
Suggest two reasons why the directors had chosen to use activity based costing (ABC) rather than traditional costing methods in setting the selling prices.
See it on the paper → - 9706/43 · May/June 2024 · Q1e[2]
Suggest two reasons why the directors had chosen to use activity based costing (ABC) rather than traditional costing methods in setting the selling prices. ,
See it on the paper → - 9706/22 · October/November 2023 · Q4a[6]
Complete the table to show the apportionment of the budgeted overheads for the year ended 31 August 2023. Total $ Indirect wages 420 000 Factory rent and rates 30 000 Machine overheads 22 000 Total overheads 472 000 Production departments Service departments Machining $ Stores $ Assembly $ Maintenance $ Apportion Store...
See it on the paper → - 9706/42 · October/November 2023 · Q1a[3]
Explain what is meant by ‘activity based costing’ (ABC).
See it on the paper → - 9706/21 · May/June 2023 · Q4a[5]
Complete the following table to show the apportionment of factory overheads and the reapportionment of service department overheads. Production departments Factory overheads Service departments Cutting Assembly Maintenance Canteen $ $ $ $ 223 480 217 980 45 270 36 260 Depreciation of machinery Power Total overheads Rea...
See it on the paper → - 9706/21 · May/June 2023 · Q4b[2]
Calculate, to two decimal places, an overhead absorption rate for each production department, using a suitable basis. Additional information The following information is available. Direct labour rate per hour Machine hours per unit Labour hours per unit Cutting department $10.90 8 3 Assembly department $8.20 6 4 Direct...
See it on the paper → - 9706/21 · May/June 2023 · Q4c[5]
Calculate the selling price to be quoted for this order of 40 units.
See it on the paper → - 9706/21 · May/June 2023 · Q4d[2]
State two causes of under absorption of overheads. Additional information At the other factory a single product, Product Exe, is currently being made. Marginal costing is used at this factory. The following information is available. Selling price per unit $48 Contribution per unit $13 Direct labour 2.5 hours per unit a...
See it on the paper → - 9706/22 · May/June 2023 · Q4a(i)[1]
cost centre
See it on the paper → - 9706/22 · May/June 2023 · Q4a(ii)[1]
allocation of overheads
See it on the paper → - 9706/23 · October/November 2022 · Q4a[4]
Complete the table to apportion the service department costs to production departments. Production departments Service departments Total $ Machining $ Finishing $ Stores $ Allocated overheads 803 900 288 500 515 400 – – Indirect labour 459 000 106 000 52 000 70 000 231 000 Other indirect costs 360 000 114 000 56 000 78...
See it on the paper → - 9706/31 · May/June 2022 · Q5a[8]
Prepare a statement to calculate the selling price per unit for each of Product S and Product P. The statement should also show the total cost per unit for each product. Additional information The management accountant suggested that activity based costing should be adopted and provided an analysis of the budgeted annu...
See it on the paper → - 9706/31 · May/June 2022 · Q5b[3]
Explain what is meant by the term ‘activity based costing’.
See it on the paper → - 9706/31 · May/June 2022 · Q5c[9]
Prepare a statement to calculate the selling price per unit for each of Product S and Product P by using activity based costing. The statement should also show separately the total cost and total cost per unit for each product.
See it on the paper → - 9706/31 · May/June 2022 · Q5d[5]
Advise the directors whether or not they should adopt activity based costing. Support your answer with reference to (a) and (c).
See it on the paper → - 9706/33 · May/June 2022 · Q5a[8]
Prepare a statement to calculate the selling price per unit for each of Product S and Product P. The statement should also show the total cost per unit for each product. Additional information The management accountant suggested that activity based costing should be adopted and provided an analysis of the budgeted annu...
See it on the paper → - 9706/33 · May/June 2022 · Q5b[3]
Explain what is meant by the term ‘activity based costing’.
See it on the paper →
What examiners said
Required the apportionment of the budgeted overheads for the year. The task was generally well answered with most candidates scoring either five or six of the available six marks.
— Examiner report, October/November 2023, 9706/22 Q4(a) (Cambridge)
Most candidates demonstrated an understanding of activity based costing (ABC) and were able to provide a reasonable explanation. However, some candidates explained advantages and disadvantages of ABC.
— Examiner report, October/November 2023, 9706/42 Q1(a) (Cambridge)
Required candidates to show the apportionment of factory overheads and the subsequent reapportionment of service department overheads. Several candidates did not attempt an answer though candidates who did, tended to gain high marks.
— Examiner report, May/June 2023, 9706/21 Q4(a) (Cambridge)
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