A.In an ABC system, which of the following is likely to be classified as a batch level activity?
(A) Machine set-up
(B) Product design
(C) Inspection of every item produced
(D) Production manager’s work
(E) Advertising.
B. XY Ltd manufactures two products, the X and the Y. Data for last period were as follows:
X Y
Production output (units) 450 11,550
Batch size (units) 30 35
Set-up costs incurred = £24,150.
Using an activity-based costing approach, the set-up costs allocated to products X and Y would be:
Product X Product Y
(A) £780 £23,370
(B) £906 £23,244
(C) £1,050 £23,100
(D) £11,146 £13,004
(E) £12,075 £12,075
C. When building up the cost of a product or service using activity-based costing, which of the following would NOT be used as levels of classification?
(i) unit;
(ii) batch;
(iii) value added;
(iv) product;
(v) non-value added;
(vi) facility.
(A) (ii) and (iii)
(B) (iii) and (iv)
(C) (iii) and (v)
(D) (iii), (iv) and (vi)
(E) (v) and (vi)