alleryStart learning →Overhead is Rs 8,000 conventionally and Rs 12,000 under ABC. The product is
AOvercosted by Rs 8,000
BUndercosted by Rs 4,000
COvercosted by Rs 4,000
DCosted accurately
Answer & Solution
Correct answer: B. Undercosted by Rs 4,000
Conventional costing charged 4,000 less than ABC's consumption-based figure, so the product was undercosted by Rs 4,000.
Keep practising Activity Based Costing
Browse all Activity Based Costing questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
Setup pool Rs 60,000, 150 setups. Product A used 90 setups. A's share?ABC assigns Rs 36,000 overhead to 1,200 units. Overhead per unit?Service pool Rs 1,80,000 for 6,000 calls. A client making 40 calls bears?Overhead Rs 1,00,000 split by units: A 1,000, B 4,000. A's volume-based share?Setup pool Rs 1,00,000 for 100 setups. Product A: 1,000 units, 50 setups. Setup cost per uOverhead Rs 2,00,000 over 10,000 labour hours. Product using 400 hours gets?Setup Rs 60,000 (200 setups), machine Rs 40,000 (2,000 hrs). Batch of 50 units: 10 setups,Handling pool Rs 2,00,000 for 8,000 moves. A batch needing 60 moves costs?