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Absorption costing q

KKrishna6y ago
Why does traditional Absorption costing tend to under-allocate overhead costs to low-volume products ? Thanks :)
C-Cath - CIMA Tutor6y ago#1
Hi Anonymous570 Compared to the other questions... this one is less complex... OK - overhead costing assumes more machine hours (or labour hours) or units means more overheads for that product type Low volume product lines may not use many machine/ labour hours or have many units... but those product types might still be causing a good proportion of the overhead total costs - eg purchasing/ ordering/ storage costs etc.. but they dont receive a fair share of these because not many machine hours are used in their actual production. Hope that explains..
KKrishna6y ago#2
Makes sense, thanks :)
C-Cath - CIMA Tutor6y ago#3
My pleasure - Good luck for Monday exam
KKrishna6y ago#4
passed the exam ! Yipee :)
C-Cath - CIMA Tutor6y ago#5
That is absolutely wonderful news - well done!! Delighted for you!! ?
SSarasi6y ago#6
Cheers! Done well! May I ask ,does the computer white board too hard to manage, I mean with the time? I am going to book my exam online, but a bit worried about white board as many of us haven't used to such a tool specially when we are dealing time. Really appreciate your feedback. Thanks!
C-Cath - CIMA Tutor6y ago#7
Hi Sarasiw.... sorry to butt in but its the tutor -question forum... lots of discussion on this type of thing on the CIMA student board though (link below) https://opentuition.com/forum/cima-forums/operational-level-forums/ It is true that it is an extra struggle -especially for mathematical exams like P1 & F1 etc not to be able to note down rough workings with a pen & paper (due to the exams-at-home invigilation rules). The practice whiteboard software is on the link below: https://www.cimaglobal.com/Canvas/?utm_medium=email&utm_source=SFMC&utm_campaign=Insider_May2020&utm_content=280763 There are also some independent non-Pearson Vue centres which offer social distancing that are still operating for CIMA exams - when you book your exam via MyCIMA you should see a list of these (nearest distance first) I do advise you to call up to check before you travel too far though. Anyway - hopefully thats helpful! Many Thanks, Cath
SSarasi6y ago#8
Thanks Cath.
C-Cath - CIMA Tutor6y ago#9
you're welcome
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