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CA Inter Activity Based Costing — practice questions — page 2

Explore 54 free Activity Based Costing questions in CA Inter Cost and 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 31–54 of 54.

In CIMA's view, resources are assigned first to what?Read the answer and worked solution →A resource cost driver measures what?Read the answer and worked solution →Which is an executional cost driver?Read the answer and worked solution →Michael Porter calls cost drivers the structural what of an activity's cost?Read the answer and worked solution →In Porter's example, which driver makes a small cargo vessel costlier per unit?Read the answer and worked solution →For short-term indirect variable costs, the driver is generallyRead the answer and worked solution →The largest non-interest expense in financial institutions is usuallyRead the answer and worked solution →An independent 2008 report found manually driven ABC wasRead the answer and worked solution →Process re-engineering through ABC aims to eliminate what?Read the answer and worked solution →ABC seeks which relationship to assign costs objectively?Read the answer and worked solution →Lean accounting is primarily used within which area?Read the answer and worked solution →A setup pool of Rs 90,000 arises from 300 setups. Cost per setup?Read the answer and worked solution →Machine pool Rs 1,20,000 over 4,000 hours. Share for 500 hours used?Read the answer and worked solution →Inspection pool Rs 48,000, 160 inspections. Cost for 40 inspections?Read the answer and worked solution →Order pool Rs 75,000 for 500 orders. A product placing 120 orders bears?Read the answer and worked solution →Handling pool Rs 2,00,000 for 8,000 moves. A batch needing 60 moves costs?Read the answer and worked solution →Setup Rs 60,000 (200 setups), machine Rs 40,000 (2,000 hrs). Batch of 50 units: 10 setups, 100 hrs. Cost/unit?Read the answer and worked solution →Overhead Rs 2,00,000 over 10,000 labour hours. Product using 400 hours gets?Read the answer and worked solution →Overhead is Rs 8,000 conventionally and Rs 12,000 under ABC. The product isRead the answer and worked solution →Setup pool Rs 1,00,000 for 100 setups. Product A: 1,000 units, 50 setups. Setup cost per unit?Read the answer and worked solution →Overhead Rs 1,00,000 split by units: A 1,000, B 4,000. A's volume-based share?Read the answer and worked solution →Service pool Rs 1,80,000 for 6,000 calls. A client making 40 calls bears?Read the answer and worked solution →ABC assigns Rs 36,000 overhead to 1,200 units. Overhead per unit?Read the answer and worked solution →Setup pool Rs 60,000, 150 setups. Product A used 90 setups. A's share?Read the answer and worked solution →

Worked practice questions

In CIMA's view, resources are assigned first to what?

  1. Cost objects
  2. Departments
  3. Activities
  4. Customers
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Correct answer: C. Activities

Resources go to activities first, and activities then pass cost to cost objects using consumption estimates.

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A resource cost driver measures what?

  1. Share of profit from an activity
  2. Frequency of demand on an activity
  3. Quantity of resources an activity uses
  4. Total price paid for a resource
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Correct answer: C. Quantity of resources an activity uses

A resource cost driver captures the amount of resources consumed by an activity and assigns resource cost to that activity.

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Which is an executional cost driver?

  1. Use of technology
  2. Product complexity
  3. Scale of operations
  4. Capacity utilization
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Correct answer: D. Capacity utilization

Executional drivers arise from how activities are carried out, and capacity utilization is a listed example.

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How to practise

  1. Choose a Activity Based Costing question and try to work out your answer.
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More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostInventory ValuationBudgets and Budgetary ControlJob Costing