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CIMA Advanced Management Accounting P2 Question # 52 Topic 6 Discussion

CIMA Advanced Management Accounting P2 Question # 52 Topic 6 Discussion

P2 Exam Topic 6 Question 52 Discussion:
Question #: 52
Topic #: 6

An organization produces only two products. Each month it produces 1,000 units of product A and 10,000 units of product B.

Using traditional absorption costing the products have very similar unit costs. However when costs are calculated using activity-based costing (ABC), product A's unit cost is significantly higher than that of product B.

Which of the following factors has the potential to cause this difference?

Select ALL that apply.


A.

ABC cost calculations are not simply volume-related.


B.

ABC costs are driven only by the volume of output.


C.

ABC considers only marginal costs.


D.

ABC uses multiple cost drivers to trace overhead costs to products.


E.

ABC considers only direct costs.


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