Chapter 4 - Re-Apportionment Of Service Department Overheads Flashcards
1
Q
Service departments within production businesses
Why are the overheads of service cost centres charged to production cost centres ?
A
Service departments themselves do not have any cost units for the overheads to be charged to
2
Q
What are the two ways overheads from service cost centres can be charged to production cost centres ?
A
- Direct apportionment
- step-down method
3
Q
To make profit a business must ensure that ?
A
Its selling prices more than cover all its costs
4
Q
What is the OAR ?
A
Overhead Absortion Rate
