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CIPS L4M5 Exam - Topic 13 Question 45 Discussion

Absorption costing is when the total cost per each unit of output:
C) Includes an allocation for a proportion of total production costs
A) Includes an allocation towards the activity cost of its creation
B) Includes an allocation towards indirect costs used in its creation
D) Includes an allocation of producing an additional unit

CIPS L4M5 Exam - Topic 13 Question 45 Discussion

Actual exam question for CIPS's L4M5 exam
Question #: 45
Topic #: 13
[All L4M5 Questions]

Absorption costing is when the total cost per each unit of output:

Show Suggested Answer Hide Answer
Suggested Answer: C, E

There are many macro economic factors that could influence procurement in general and commercial negotiation in particular. Below are six factors that are agreed to be fairly significant:

* Economy growth rate

* Inflation rates

* Interest rates

* Currency exchange rate

* Unemployment rate

* Protectionism

LO 2, AC 2.2


by Arminda at Aug 08, 2023, 01:01 AM

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Armando
9 months ago
Definitely option C, it’s about total production costs!
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Barbra
10 months ago
Wait, does it really include all those costs? Sounds too good to be true.
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Micheal
10 months ago
I think it’s mostly about indirect costs, right?
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Queen
10 months ago
Totally agree, it covers all production costs!
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Johnna
10 months ago
Absorption costing includes both fixed and variable costs.
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Felix
11 months ago
I thought absorption costing was more about fixed costs, so D doesn't seem to fit, but I can't recall the exact details.
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Wenona
11 months ago
I'm a bit confused about the definitions, but I feel like A could be right since it talks about activity costs.
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Alica
11 months ago
I remember a practice question that mentioned total production costs, which makes me lean towards C.
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Annmarie
11 months ago
I think absorption costing includes indirect costs, so maybe it's B? But I'm not entirely sure.
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Chantell
11 months ago
I'm a little confused by this question. There are a few different options presented, and I'm not sure which one would be the most effective. I'll need to think it through carefully and review the details before deciding on the best approach.
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Vince
11 months ago
I remember a similar question where we discussed using charts to assess test progress. I think B might be correct since it reveals issues.
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Altha
11 months ago
FlightControl seems like it could be the feature they're looking for, but I'm a bit confused by the wording of the question.
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Martin
11 months ago
Wait, I'm a little confused. Is the independent variable the patient days or the maintenance cost? I need to re-read the question and data carefully to make sure I understand what they're asking for.
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Cristina
11 months ago
Hmm, I'm not too sure about this one. I know there are a lot of different IEEE standards and I'm not super familiar with the wireless ones. I'll have to think this through carefully.
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Truman
1 year ago
Well, time to put on my accountant hat. Option C is the clear winner here. Gotta love those indirect costs, am I right?
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Elza
1 year ago
I see your point, but I still think option A is the most accurate. Allocating towards the activity cost is key in absorption costing.
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Kathryn
1 year ago
I think option B is also important. Including an allocation towards indirect costs is crucial for accurate costing.
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Darrin
1 year ago
I agree, option C is the best choice. Indirect costs play a big role in absorption costing.
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Georgeanna
1 year ago
Haha, 'absorption costing' - sounds like something out of a science fiction movie! But in all seriousness, Option C is the way to go.
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Natalie
1 year ago
I'm not sure, but I think Option D might be the right choice for absorption costing.
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Jeannine
1 year ago
Actually, I believe Option A is the best answer, as it includes activity costs.
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Major
1 year ago
I think Option B makes more sense, as indirect costs are important in production.
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Carmelina
1 year ago
I agree, Option C is the correct choice.
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Fernanda
1 year ago
D) Includes an allocation of producing an additional unit
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Reid
1 year ago
C) Includes an allocation for a proportion of total production costs
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Albina
1 year ago
B) Includes an allocation towards indirect costs used in its creation
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Donte
1 year ago
A) Includes an allocation towards the activity cost of its creation
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Alonso
1 year ago
I agree with Georgene. Absorption costing is about including all costs associated with production, not just the direct costs.
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Michael
1 year ago
User 2
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Burma
1 year ago
User 1
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Azalee
1 year ago
I'm not sure, but I think it might be B, as indirect costs are also included in absorption costing.
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Hollis
1 year ago
I agree with Clare, because absorption costing includes a proportion of total production costs.
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Georgene
1 year ago
Option C seems to be the correct answer. Absorption costing includes an allocation of all production costs, both direct and indirect, to each unit of output.
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Willis
1 year ago
Exactly, it provides a more accurate reflection of the total cost of production.
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Lynelle
1 year ago
So, absorption costing helps in spreading out all production costs evenly across units.
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Cordelia
1 year ago
Yes, that's right. It includes both direct and indirect costs in the total cost per unit.
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Noah
1 year ago
I think option C is correct. Absorption costing includes all production costs in each unit.
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Clare
1 year ago
I think the answer is C.
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