ABC Costing – Pg 12 in revision kit BPP – Jola Publishing Co

Hi there,

I am currently working on some mcq questions on ABC, and i came across the mcq question which asks for the steps that need to be followed for ABC.

In the lecture note that i downloaded from opentuition, it states that the order is as follows:
1. Identify the major activities that give rise to overheads.
2. Determine what causes the cost of each activity – the cost driver.
3. Calculate the total cost for each activity – the cost pool.
4. Calculate an absorption rate for each cost driver.
5. Calculate the total overhead cost for each product manufactured.
6. Calculate the overhead cost per unit for each product

But in the revision kit for BPP, the answer given for this question is,
1. Identify major activities within each department which create cost
2. Create a cost centre/cost pool for each activity – ‘the activity cost pool’
3. Determine what causes the cost of each activity – the ‘cost driver’
4. Calculate the absorption rate for each ‘cost driver’
5. Calculate the overhead cost per unit of CB and TJ

I am NOT concerned with the amount of steps. But my concern that no 2 and no 3 from the two lists given are not the same order. In lecture note, we have, “Determine what causes the cost of each activity – the cost driver”, in 2nd position, but it is 3rd position in the revision kit for BPP.

The position are also interchanged for “Calculate the total cost for each activity – the cost pool”.

I initially thought of the answer as you showed in the lecture note, but that answer is not even in the options. If i got such question in exam, i would be really puzzled as there is not even the answer there.

Please help
What is the correct order?