Which of the following statements is correct? Overhead absorption is a way of:

Question

Quizplus · Accepted Answer

Overhead absorption is a way of allocating an appropriate portion of overhead costs to cost units, which helps in determining the full cost of a product or service. Option A refers to apportionment of overhead costs between cost centres, which is a different concept. Option C refers to cost classification, which is not directly related to overhead absorption. Option D refers to apportionment of non-production overheads between service departments, which is also not directly related to overhead absorption.

Which of the Following Statements Is Correct? Overhead Absorption Is