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When is service costing used?
A When overhead absorption is straightforward
B When indirect costs are a small proportion of total costs
C When the output is intangible
D When the absence of a physical product makes it impossible to determine unit costsAnswer C.
Why D is incorrect?D: yes, I service costing there is no physical product, but the cost of a curious of service can be determined.
For example, a laundry can calculate how much it costs to wash a single sheet, double sheet, shirt etc.
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