1.A colleague has been discussing Activity Based Costing (ABC) andstates the following:(i) ABC is easier, quicker and cheaper to implement than traditionalabsorption costing(ii) The main difference between ABC and traditional absorptioncosting is in the value of inventory(a) Both statement i and statement ii(b) Only statement i(c) Only statement ii(d) Neither statement I nor statement ii 2.A company is using Activity Based Costing to apportion its overheadsbetween products.Product Z has a budgeted volume of 50,000. The company producesthe product in batches of 1,000 and each batch has two inspections.It has calculated the absorption rates to be £1,200 per batch for set-up costs and £1,500 per inspection.What is the total budgeted unit overhead cost for product Z?(a) £2.10(b) £2.70(c) £4.20(d) £84.00

In costing the allocation of overhead is very important and accurate allocation allow the proper…

A colleague has been discussing Activity Based Co states the following: (i) ABC is easier, quicker and cheaper to implemen absorption costing (ii) The main difference between ABC and traditiona costing is in the value of inventory (a) Both statement i and statement ii (b) Only statement i (c) Only statement ii

A colleague has been discussing Activity Based Co states the following: (i) ABC is easier, quicker and cheaper to implemen absorption costing (ii) The main difference between ABC and traditiona costing is in the value of inventory (a) Both statement i and statement ii (b) Only statement i (c) Only statement ii

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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