Marginal costing: past paper questions
Real questions on marginal costing
The newest 20 of 87 written questions. Open one to see it on the real paper.
- 9706/22 · October/November 2025 · Q1c[7]
Advise the directors which option they should choose. Justify your advice by discussing both financial and non-financial factors of each option.
See it on the paper → - 9706/22 · October/November 2025 · Q4c[2]
Explain why the profit for marginal costing is different to the profit for absorption costing. Per unit Wye $ Zed $ Selling price 61 64 Direct materials 20 28 Direct labour 18 20 Fixed costs 8 8 The budgeted production and sales for one month are: Wye 4000 units and Zed 1200 units. Demand for Zed has fallen recently an...
See it on the paper → - 9706/22 · October/November 2025 · Q4d[6]
Calculate the total monthly profit to be made if Option A is chosen.
See it on the paper → - 9706/22 · October/November 2025 · Q4e[7]
Prepare a marginal costing statement to show the total monthly profit to be made if Option B is chosen.
See it on the paper → - 9706/22 · October/November 2025 · Q4f[7]
Advise the directors which option they should choose. Justify your choice by discussing both financial and non-financial factors.
See it on the paper → - 9706/23 · October/November 2025 · Q4a[4]
Explain two differences between marginal costing and absorption costing. Production departments Overheads allocated Service departments Total $ Cutting $ Assembly $ Maintenance $ Stores $ 178 830 77 850 51 330 27 150 22 500 The following additional budgeted information is available about the departments. Production dep...
See it on the paper → - 9706/23 · October/November 2025 · Q4b[4]
Complete the table to show the reapportionment of service department overheads. Production departments Overheads allocated Service departments Total $ Cutting $ Assembly $ Maintenance $ Stores $ 178 830 77 850 51 330 27 150 22 500 Additional information The following forecast information is available for the two produc...
See it on the paper → - 9706/23 · October/November 2025 · Q4c[4]
Calculate, to two decimal places, the overhead absorption rates for each department for the year ended 30 September 2025. Cutting department Assembly department Additional information For the year ended 30 September 2025, actual results for the assembly department were as follows: Total overheads $65 600 Labour hours 6...
See it on the paper → - 9706/23 · October/November 2025 · Q4d[3]
Calculate the over‑absorption or under‑absorption of overheads for the assembly department for the year ended 30 September 2025. Additional information An order was received from a customer in August 2025. The following information is available. Direct costs (material and labour) $1450 Labour hours Cutting department 1...
See it on the paper → - 9706/23 · October/November 2025 · Q4e[5]
Calculate the selling price of the order. Additional information V Limited uses marginal costing at another factory where a single type of product is made. The following budgeted information is available. $ Selling price per unit 32 Variable costs per unit 25 Fixed costs per month are $48 000. Currently, the monthly pr...
See it on the paper → - 9706/23 · October/November 2025 · Q4f[1]
Calculate the profit or loss which would be made on the order from the overseas customer.
See it on the paper → - 9706/23 · October/November 2025 · Q4g[7]
Advise the directors whether or not they should accept the order from the overseas customer. Justify your answer by discussing both the advantages and disadvantages of accepting the order.
See it on the paper → - 9706/22 · May/June 2025 · Q4a(i)[1]
contribution
See it on the paper → - 9706/22 · May/June 2025 · Q4a(ii)[1]
fixed costs
See it on the paper → - 9706/22 · May/June 2025 · Q4a(iii)[1]
margin of safety. Per unit $ Selling price 36 Direct labour 17 Direct materials 8 Fixed costs 6 The directors have a target profit of $35 000 per month. Currently, the factory is operating at full capacity of 8300 units per month. All production is sold. The following details are available about the single product. Add...
See it on the paper → - 9706/22 · May/June 2025 · Q4b(i)[3]
break-even point
See it on the paper → - 9706/22 · May/June 2025 · Q4b(ii)[1]
margin of safety.
See it on the paper → - 9706/22 · May/June 2025 · Q4c[2]
Calculate the amount by which the monthly target profit is exceeded. Additional information At a second factory, two products are currently being made, Product Exe and Product Wye. The following budgeted information is available. Product Exe Product Wye Selling price per unit $40 $38 Direct materials per unit $14 $15 D...
See it on the paper → - 9706/22 · May/June 2025 · Q4d[6]
Prepare a marginal costing statement for Option A to show the total monthly profit being made.
See it on the paper → - 9706/23 · May/June 2025 · Q4f[8]
Prepare a statement to show the total selling price for the customer’s order. Additional information Ameerah is concerned that she may be losing customers due to high selling prices. She has been considering using marginal costing rather than absorption costing in order to enable more competitive pricing.
See it on the paper →
What examiners said
Candidates were required to calculate the profit to be made for option A where the materials were limited. This proved to be difficult. There was clear evidence that many candidates did not understand the relevance of contribution. Many were not sure how to calculate profits where there was a limiting factor, in this case the materials.
— Examiner report, February/March 2025, 9706/22 Q4(d)(i) (Cambridge)
Candidates then had to calculate the profit if production was maintained, and the shortage or materials bought in from overseas. Confusion was evident with a few gaining full marks, but the majority did not gain any marks for this task and even struggled to calculate the new contribution for product Cee.
— Examiner report, February/March 2025, 9706/22 Q4(d)(ii) (Cambridge)
The final question asked candidates to advise the directors of which of the two options should be selected. This was well answered considering it was the last task, showing that not many candidates had timing issues. The evaluation task received a good response with many candidates making a clear, supported decision, and pointing out the advantages and disadvantages of the two options. Stronger re...
— Examiner report, February/March 2025, 9706/22 Q4(e) (Cambridge)
Past papers, syllabus and examiner reports © UCLES (Cambridge University Press & Assessment). Questions are matched to topics from the official syllabus. AssessPro is independent and not endorsed by Cambridge.