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)