Activity based costing (ABC)

Worked examples (10)

• 1Why ABC? (4 marks)
• 2Pool or driver? (4 marks)
• 3Cost driver rate (3 marks)
• 4Charge overhead to a product (4 marks)
• 5Two cost pools (5 marks)
• 6Overhead per unit (4 marks)
• 7Full cost per unit under ABC (6 marks)
• 8Three cost pools (6 marks)
• 9Choosing the right driver (4 marks)
• 10The four steps (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Two benefits of ABC (4 marks)
• 2Two limitations of ABC (4 marks)
• 3ABC and pricing (4 marks)
• 4ABC and cost control (4 marks)
• 5Cost vs benefit (4 marks)
• 6When ABC suits a firm (4 marks)
• 7When ABC is not worthwhile (4 marks)
• 8Costs ABC can't allocate accurately (4 marks)
• 9Advise on adopting ABC (5 marks)
• 10ABC and product decisions (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Build the cost driver rates (5 marks)
• 2Cost one product (6 marks)
• 3Cost a second product (6 marks)
• 4Cost under absorption costing (5 marks)
• 5Compare ABC and absorption (5 marks)
• 6Profit per unit each way (5 marks)
• 7Advise on a product (5 marks)
• 8Organise the working (4 marks)
• 9Cost reduction from ABC (4 marks)
• 10Remind on total profit (3 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style

Worked examples (10)

• 1Cost under absorption costing (4 marks)
• 2Cost under ABC (5 marks)
• 3ABC redistributes overhead (4 marks)
• 4Which products cost more? (4 marks)
• 5Effect on profit per unit (4 marks)
• 6The other product gains (4 marks)
• 7Total profit unchanged (4 marks)
• 8Full comparison (6 marks)
• 9Decision implication (4 marks)
• 10Explain the cost difference (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style
• ✓Model answer — 9706 Paper 4 style