Page 274 - P1 Integrated Workbook STUDENT 2018
P. 274
Subject P1: Management Accounting
1.6 Which of the following statements regarding activity based costing (ABC)
is incorrect?
A Activity costs are absorbed into products
B Apportionment of overhead costs is not required
C Cost drivers need to be determined for each activity
D ABC can be used by non-production organisations
1.7 A company manufactures a product in a process where labour time is a
bottleneck resource.
There are 20 staff available, who can work 35 hours each per week, and the
product uses 2 hours of labour per unit.
The product is sold for $620 per unit and the material cost per unit is $220.
Total operating expenses are $70,000 each week.
The throughput accounting ratio is _________________
(Your answer should be rounded down to the nearest whole number)
1.8 For a company using environmental costing, the cost of disposing of
harmful waste is likely to be classified as which type of cost?
A Appraisal cost
B Prevention cost
C Internal failure cost
D External failure cost
1.9 Match the inventory valuation method to the correct costing system:
Inventory valuation Costing system
Material cost per unit Activity based costing
Total variable production cost per unit Marginal costing
Total production cost per unit Throughput accounting
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