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23 Which of the following statements about the determination of overhead absorption
rates is correct?
(1) Production overheads are usually recovered on the basis of floor-area used for
manufacture.
(2) Business rates should be included in overhead costs to be apportioned to
individual units.
(3) Direct labour should not be included as an overhead in the overhead allocation
and apportionment process.
A (1) and (2) only
B (1) and (3) only
C (2) and (3) only
D All three statements are correct
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