QUESTION a) The Traditional/conventional absorption costing method of allocating overhead costs to products & services while...

 

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QUESTION a) The Traditional/conventional absorption costing method of allocating overhead costs to products & services while using most suitable blanket rates. It further involves primary and secondary allocation of these overheads to various cost centres of an organisation so as to ensure production & non-production are associated with overheads incurred against them Required; i. Justify the rationale of charging overhead costs to all types of cost centres in a manufacturing organisation like Mukwano. (5 Marks) ii. To identify factors that may cause over/under absorption of overhead costs in a typical manufacturing organisation. (5 Marks) QUESTION a) The Traditional/conventional absorption costing method of allocating overhead costs to products & services while using most suitable blanket rates. It further involves primary and secondary allocation of these overheads to various cost centres of an organisation so as to ensure production & non-production are associated with overheads incurred against them Required; i. Justify the rationale of charging overhead costs to all types of cost centres in a manufacturing organisation like Mukwano. (5 Marks) ii. To identify factors that may cause over/under absorption of overhead costs in a typical manufacturing organisation. (5 Marks)