A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2022 · Q251 Mark

Which statement about absorption costing is correct?

AIt allocates fixed costs to a product when it is sold.

BIt allocates fixed costs to a product whether it is sold or not.

CIt increases the costs charged to the income statement.

DIt reduces the cost of the closing inventory.

✓ Correct answer

B: It allocates fixed costs to a product whether it is sold or not.

Oracle Prep sorts past-paper questions by topic, so you can drill Traditional costing methods and see which topics are most likely to come up next.

Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2022 Paper 1 Variant 2, question 25.

Questions and mark schemes are from past examination papers and remain the copyright of the exam board. How Oracle Prep builds its content

Which statements identify a disadvantage of break-even analysis? 1 It does not show the effect of changes in output …

Which business would use a job costing system of accounting?

Which statements about absorption costing are correct? 1 It can be used as a basis for calculating the selling price …

The partnership of Ravi and Tania, who shared profits equally, was dissolved. The capital accounts prior to dissoluti…

A company issues 50000 ordinary shares of $5 each at a premium of $15. It also issues a 4% debenture, $300000. By whi…

Which statements describe a capital reserve? 1 It is a reserve arising from a gain which is not yet realised. 2 It is…