(a)[3]
State three benefits to a business of using absorption costing.
(b)[7]
Complete the table below to display the apportionment of budgeted overhead costs for August 2019.
(c)[4]
Calculate an overhead absorption rate for each production department on an appropriate basis.
(d)[4]
Calculate the budgeted profit for this order.
(e)[5]
Calculate the total over- or under-absorption of overheads for this order. Show clearly in your workings the over-absorption or under-absorption of overheads in each department.
(f)[7]
Recommend whether production of the model that earns the least profit should be discontinued or not. Justify your answer using both financial and non-financial factors.