(a)[6]
Explain three advantages to a business of applying absorption costing.
(b)[7]
Complete the table to show how overheads are apportioned and how the service department overheads are reapportioned, using suitable bases.
(c)[4]
Calculate the overhead absorption rate, to two decimal places, for each production department by using an appropriate basis.
(d)[2]
State two reasons that might explain why overheads are under absorbed.
(e)[6]
Calculate the profit for April if Wendy’s offer is taken up.
(f)[5]
Advise the directors whether to accept Wendy’s offer or not. Support your answer with reasons.