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MAC3701 Assignment 1 Semester 1 2023 R52,78
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  5. MAC3701 - Application Of Management Accounting Techniques

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MAC3701 Assignment 1 Semester 1 2023

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MAC3701 Assignment 1 Semester % TRUSTED workings, explanations and solutions. For assistance call or us on 079 811 9845 . QUESTION 1 Which one of the following is not a characteristic of activity-based-costing (��ABC”) system? A. Because of the extensive number of cost drivers that must be ...

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  • March 8, 2023
  • March 8, 2023
  • 37
  • 2022/2023
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MAC3701
ASSIGNMENT 1 SEMESTER 1 2023

, QUESTION 1

Which one of the following is not a characteristic of activity-based-costing
(“ABC”) system?

A. Because of the extensive number of cost drivers that must be identified
and measured, this costing system can be prohibitively expensive to
implement and operate.

B. The allocation basis is referred to as ‘cost driver’, as a cause-and-effect
relationship exists between cost and allocation basis.

C. Multiple overhead rates can be calculated, one per department or cost
centre.

D. Overhead costs are accumulated and assigned to products in
accordance with activities, based on the number of resources used by
each product. Multiple overhead rates are calculated: one per activity.




QUESTION 1 ANSWER EXPLANATION;

A. Because of the extensive number of cost drivers that must be identified and measured, this
costing system can be prohibitively expensive to implement and operate, is a characteristic of
activity-based-costing (“ABC”) system. Therefore, option A is not the correct answer.

The correct answer is C. Multiple overhead rates can be calculated, one per department or cost
centre. This is not a characteristic of activity-based-costing (“ABC”) system. In ABC system,
overhead costs are accumulated and assigned to products in accordance with activities, based
on the number of resources used by each product. Multiple overhead rates are calculated: one
per activity, not per department or cost centre.

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