AQA Accounting: Absorption costing

A cost unit is ...

• A unit of output to which costs can be charged

• A section of a business to which costs can be charged

• A group of overhead costs incurred by the same activity

• Something which causes costs to be incurred

A cost centre is ...

• A unit of output to which costs can be charged

• A section of a business to which costs can be charged

• A group of overhead costs incurred by the same activity

• Something which causes costs to be incurred

A cost driver is ...

• A unit of output to which costs can be charged

• A section of a business to which costs can be charged

• A group of overhead costs incurred by the same activity

• Something which causes costs to be incurred

A cost pool is ...

• A unit of output to which costs can be charged

• A section of a business to which costs can be charged

• A group of overhead costs incurred by the same activity

• Something which causes costs to be incurred

Cost drivers and cost pools come into ...

• Absorption costing

• Activity based costing

• Marginal costing

• Standard costing

Cost units and cost centres come into ...

• Absorption costing

• Activity based costing

• Marginal costing

• Standard costing

The cost of producing one extra unit come into ...

• Absorption costing

• Activity based costing

• Marginal costing

• Standard costing

Calculating costs in advance of production comes into ...

• Absorption costing

• Activity based costing

• Marginal costing

• Standard costing

Absorption costing absorbs which costs into the cost units?

• Just fixed costs

• Just variable costs

• Just direct costs

• All costs

Absorption costing is used to ...

• Calculate the cost of one additional unit

• Set costs in advance of production

• Calculate profit and value inventory

• Identify reasons why overheads are incurred for a particular activity