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ACCA Skills Level Activity-Based Costing — practice questions

Explore 6 free Activity-Based Costing questions in ACCA Skills Level Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Activity-Based Costing questions and exercises with answers

Showing questions 1–6 of 6.

Match each activity to its driverRead the answer and worked solution →Flip to match each activity rateRead the answer and worked solution →Sort costs by how they get a rateRead the answer and worked solution →Pick the bigger overhead amountRead the answer and worked solution →In activity based costing, what is an activity?Read the answer and worked solution →Budgeted total cost of setups is $1,700 and the budgeted number of setups is 34. What is the activity rate for setups?Read the answer and worked solution →

Worked practice questions

Match each activity to its driver

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Matching pairs
  1. Left
    Production setup
    Right
    Number of setups
  2. Left
    Quality control
    Right
    Number of inspections
  3. Left
    Materials handling
    Right
    Number of material moves
  4. Left
    Electric power
    Right
    Kilowatt hours used
  5. Left
    Payroll
    Right
    Number of payroll checks processed
  6. Left
    Human resources
    Right
    Number of employees
Instructions
Tap an activity, then tap the count that measures how often it happens.
_Source: Jonick, Principles of Managerial Accounting, section 4.4 Activity-Based Costing for a Manufacturing Business_

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Flip to match each activity rate

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Matching pairs
  1. A
    Setups
    B
    $50 per setup
  2. A
    Moves
    B
    $15 per move
  3. A
    Inspections
    B
    $25 per inspection
  4. A
    Clean-ups
    B
    $10 per cleanup
  5. A
    Cutting
    B
    $30 per machine hr
  6. A
    Assembly
    B
    $15 per labor hour
Instructions
Flip two cards to pair an activity with the rate charged each time it happens.
_Source: Jonick, Principles of Managerial Accounting, section 4.4 Activity-Based Costing for a Manufacturing Business_

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Sort costs by how they get a rate

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Left
Traced activity
Items
  1. Item
    Setups
    Answer
    Traced activity
  2. Item
    Material moves
    Answer
    Traced activity
  3. Item
    Inspections
    Answer
    Traced activity
  4. Item
    Clean-ups
    Answer
    Traced activity
  5. Item
    Factory insurance
    Answer
    General overhead
  6. Item
    Maintenance
    Answer
    General overhead
  7. Item
    Utilities
    Answer
    General overhead
  8. Item
    Depreciation
    Answer
    General overhead
Right
General overhead
Instructions
Swipe left for an activity with its own rate, right for general factory overhead.
_Source: Jonick, Principles of Managerial Accounting, section 4.4 Activity-Based Costing for a Manufacturing Business_

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