A-LevelAccountingCosting and Inventory ValuationOct/Nov 2011Paper 1 Q281 Mark
What is a benefit of using absorption costing?
AIt allows a business to calculate the break-even point for production.
BIt allows a business to calculate the total cost of goods produced.
CIt allows a business to show a lower value for year end inventory.
DIt allows decision-making on utilising spare capacity by increasing production.
✓ Correct Answer
The correct answer is B. This question tests the candidate's understanding of costing and inventory valuation within the Accountingsyllabus. The examiner's mark scheme requires...
📋 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...
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