Accounting Multiple Choice Question – 18 November 2020

Which of the following is a benefit of absorption costing?

Select ONE answer:

1. It allows a business to calculate the break-even point for production.
2. It allows a business to calculate the total cost of goods produced.
3. It allows a business to calculate the profit to be made on a product.
4. It allows decision making on utilising spare capacity by increasing production.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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