Theory Qs

[steelman]

IN RELATION TO A MANUFACTURING COMPANY OPERATING AN ABSORPTION COSTING SYSTEM, ARE THESE STATEMENTS TRUE OR FALSE?

1) OVERHEADS ARE APPORTIONED TO THE COST CENTRES THAT CAN BE CLEARLY IDENTIFIED TO HAVE INCURRED THEM.
2) OVEHEADS ABSORPTION RATES ARE CALCULATED FOR SERVICE COST CENTRES SO THAT THE SERVICE COSTS CAN BE ABSORBED INTO THE PRODUCT

SUGGESTED ANS= BOTH ARE FALSE

RIGHT OR WRONG

[hariharm]

In fact, both the statements are true!