[amp_mcq option1=”charging overheads to cost centres” option2=”charging of overheads to cost units” option3=”charging of overheads to cost centres or cost units” option4=”allotment of overheads to different departments” correct=”option3″]<\/p>\n
The correct answer is: C. charging of overheads to cost centres or cost units.<\/p>\n
Absorption costing is a method of accounting for overhead costs that allocates all overhead costs to products or services. This is done by assigning overhead costs to cost centers, which are then assigned to cost units. Cost centers are areas of an organization where costs are incurred, such as production, marketing, or administration. Cost units are the products or services that an organization produces or provides.<\/p>\n
Absorption costing is a more accurate way of accounting for overhead costs than other methods, such as direct costing. Direct costing only assigns direct costs to products or services, while absorption costing assigns both direct and indirect costs. This makes absorption costing more useful for decision-making, such as pricing and product mix decisions.<\/p>\n
However, absorption costing can also be more complex than other methods. This is because it requires more detailed information about overhead costs and cost centers. Additionally, absorption costing can lead to higher product costs, which can make it less competitive in the marketplace.<\/p>\n
Overall, absorption costing is a more accurate way of accounting for overhead costs than other methods. However, it can also be more complex and lead to higher product costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”charging overheads to cost centres” option2=”charging of overheads to cost units” option3=”charging of overheads to cost centres or cost units” option4=”allotment of overheads to different departments” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-46802","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n