Activity based costing - Osborne Professional Dip synoptic Workbook, assessment 3, task 4

Oniyama100 Registered Posts: 7 New contributor 🐸
Hi there,

I am stuck on a question in the Osborne text, this is (Osborne Professional Diploma Synoptic Workbook, Assessment 3, task 4, p. 47). Screen shot of question attached.

The question is on ABC costing, and I have correctly got as far as:

£180,000/90 = £2,000 design/redesign costs per recipe.

Then, the answer does:
Soup: £2,000 / 24 days /1,000 litres x 100p = 8.33p

Can anyone tell me why this is multiplied by 100p??? I understand all the rest, but unsure what the logic is here. Anyone know what I'm missing here :-(

Same goes for next part of the question, answer is:
£2,000 / 300 days / 7,000 sausages x 100p = 0.10p

Please can anyone explain?



  • Pian32
    Pian32 Registered Posts: 474 Dedicated contributor 🦉
    It's a conversion from pounds to pence
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  • Oniyama100
    Oniyama100 Registered Posts: 7 New contributor 🐸
    Thanks @Pian32. I see the mention of it in the question now. It's a sneaky curve ball, I have never seen an AAT question expressed like this. Many thanks again!
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