The correct answer is D. Repeated distribution method.
Cost absorption is the process of allocating production costs to units produced. This is done in order to determine the cost of each unit and to assign costs to inventory and cost of goods sold.
There are a number of different methods of cost absorption, including:
- Percentage of direct material cost: This method allocates production costs based on the percentage of direct material cost to total production cost.
- Machine hour rate: This method allocates production costs based on the number of machine hours used in production.
- Labour hour rate: This method allocates production costs based on the number of labour hours used in production.
- Direct costing: This method allocates only direct costs to units produced.
- Absorption costing: This method allocates both direct and indirect costs to units produced.
The repeated distribution method is not a recognized method of cost absorption. It is a method that is sometimes used in practice, but it is not a generally accepted accounting principle.
The repeated distribution method is based on the assumption that all costs are variable costs. This is not a realistic assumption, as many costs are fixed costs. As a result, the repeated distribution method can lead to inaccurate cost allocations.
In conclusion, the correct answer is D. Repeated distribution method.