A manufacturing business has a service department, X, and production departments, Y and Z. Department Z is labour intensive. How is the overhead absorption rate set for department Z?
✓ Correct Answer
The correct answer is A: first task: apportion total overheads across X, Y and Z; second task: reapportion X's overheads to Y and Z; third task: divide Z's overheads by budgeted labour hours
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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