Cost Pools – NBC Institute

MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

Question

Which of the following cost pools to cost drivers relationship is incorrect?
A. Set-up to number of set-ups
B. Material handling to number of material movement
C. Maintenance to number of maintenance
D. Depreciation of machine to number of machine hours
E. Material procurement to number of inspection

Answer

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Tags: ABC, Cost Drivers, Cost Pools
Level: Level 1

Topic: Costing Techniques
Series: MAY 2017

MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

Question

The details of unit cost of products X, Y, and Z have been provided below:

Product	X	Y	Z
Demand (units)	1,200	2,800	3,000
GH¢	GH¢	GH¢	GH¢
Direct Material	70	55	40
Direct Labour	65	60	38
Variable Overheads	11	8	7
Fixed Overhead	32	24	20

Additional information:

The fixed overheads were absorbed at the rate of GH¢8 per machine hour.
The budgeted fixed overheads of GH¢165,600 can be analysed into the following cost pools with their respective percentages for apportionment:

Cost Pool Percentages (%)

Batch 20

Machinery 45

Customer service 25

Deliveries 10
The following also relates to the activities of the company:

Cost Pool	Percentages (%)
Batch	20
Machinery	45
Customer service	25
Deliveries	10

Product	X	Y	Z
Units in a batch	120	140	200
Quantities per delivery	100	280	250
Number of customers	50	180	220

Required:
i) Calculate the activity rates per batch, machine hour, customer service, and delivery.
(12 marks)

ii) Calculate the total cost of a unit of product X.
(3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Pools, Costing Techniques, Overhead Absorption, Unit Cost Calculation
Level: Level 2

Topic: Activity-based costing
Series: AUG 2022

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

Question

Dunning Limited has recently introduced an Activity Based Costing System and has
provided the following details for the month of January:

During the month, 500 units of Product Y were produced. This production run required
100 parts and 150 maintenance hours; 5 material requisitions were made and 10
employees worked on the units.
Required:
i) Using Activity Based Costing, calculate the total amount of overhead absorbed by each
unit of Product Y. (7 marks)
ii) Identify THREE different types of controls and explain how activity based costing assists
in the control of costs?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Control, Cost Pools, Overhead Absorption, Product costing
Level: Level 2

Topic: Activity-based costing
Series: MAY 2018

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

Question

Identify THREE disadvantages of a standard costing system.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Control, Cost Pools, Overhead Absorption
Level: Level 2

Topic: Activity-based costing
Series: MAY 2018

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

Question

Identify and explain briefly THREE similarities and TWO differences between activity-based costing and the traditional system of assigning overheads to products. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Drivers, Cost Pools, Overhead Allocation, Traditional Costing
Level: Level 2

Topic: Activity-based costing
Series: NOV 2016

MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: ABC, Cost Drivers, Cost Pools
Level: Level 1

Topic: Costing Techniques
Series: MAY 2017

MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

Question

The details of unit cost of products X, Y, and Z have been provided below:

Product	X	Y	Z
Demand (units)	1,200	2,800	3,000
GH¢	GH¢	GH¢	GH¢
Direct Material	70	55	40
Direct Labour	65	60	38
Variable Overheads	11	8	7
Fixed Overhead	32	24	20

Additional information:

The fixed overheads were absorbed at the rate of GH¢8 per machine hour.
The budgeted fixed overheads of GH¢165,600 can be analysed into the following cost pools with their respective percentages for apportionment:

Cost Pool Percentages (%)

Batch 20

Machinery 45

Customer service 25

Deliveries 10
The following also relates to the activities of the company:

Cost Pool	Percentages (%)
Batch	20
Machinery	45
Customer service	25
Deliveries	10

Product	X	Y	Z
Units in a batch	120	140	200
Quantities per delivery	100	280	250
Number of customers	50	180	220

Required:
i) Calculate the activity rates per batch, machine hour, customer service, and delivery.
(12 marks)

ii) Calculate the total cost of a unit of product X.
(3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Pools, Costing Techniques, Overhead Absorption, Unit Cost Calculation
Level: Level 2

Topic: Activity-based costing
Series: AUG 2022

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

Question

Dunning Limited has recently introduced an Activity Based Costing System and has
provided the following details for the month of January:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Control, Cost Pools, Overhead Absorption, Product costing
Level: Level 2

Topic: Activity-based costing
Series: MAY 2018

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

Question

Identify THREE disadvantages of a standard costing system.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Control, Cost Pools, Overhead Absorption
Level: Level 2

Topic: Activity-based costing
Series: MAY 2018

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

Question

Identify and explain briefly THREE similarities and TWO differences between activity-based costing and the traditional system of assigning overheads to products. (6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Activity-Based Costing, Cost Drivers, Cost Pools, Overhead Allocation, Traditional Costing
Level: Level 2

Topic: Activity-based costing
Series: NOV 2016

Question Tag: Cost Pools

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MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

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MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

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MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

You're reporting an error for "MA – Aug 2022 – L2 – Q2a – Activity-based costing"

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

You're reporting an error for "MA – May 2018 – L2 – Q3c – Activity-Based Costing"

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

You're reporting an error for "MA – May 2018 – L2 – Q3b – Activity-Based Costing"

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

You're reporting an error for "MA – Nov 2016 – L2 – Q1b – Activity-based costing"

MI – May 2017 – L1 – SA – Q10 – Costing Techniques

Identify incorrect cost pool to cost driver relationship.

You're reporting an error for "MI – May 2017 – L1 – SA – Q10 – Costing Techniques"

MA – Aug 2022 – L2 – Q2a – Activity-based costing

This question asks for the calculation of activity rates and the cost per unit of product X using activity-based costing.

You're reporting an error for "MA – Aug 2022 – L2 – Q2a – Activity-based costing"

MA – May 2018 – L2 – Q3c – Activity-Based Costing

Calculate the total overhead absorbed per unit using Activity-Based Costing and identify three types of cost controls.

You're reporting an error for "MA – May 2018 – L2 – Q3c – Activity-Based Costing"

MA – May 2018 – L2 – Q3b – Activity-Based Costing

Identify three disadvantages of a standard costing system.

You're reporting an error for "MA – May 2018 – L2 – Q3b – Activity-Based Costing"

MA – Nov 2016 – L2 – Q1b – Activity-based costing

Explain the similarities and differences between activity-based costing and the traditional system of assigning overheads to products.

You're reporting an error for "MA – Nov 2016 – L2 – Q1b – Activity-based costing"

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