alleryStart learning →When is the machine hour rate especially useful?
AWhen labour dominates
BWhen machines dominate
CWhen material dominates
DWhen sales are seasonal
Answer & Solution
Correct answer: B. When machines dominate
If machine running costs including rent form most of product cost, machine hours track overhead best.
Keep practising Total Absorption Costing
Browse all Total Absorption Costing questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
In the CIMA description of ABC, activities are assigned to what?In which journal did Cooper and Kaplan publish ABC articles from 1988?Drucker said ABC also records the cost of what?What limits the use of ABC, especially in services?What is a danger of ABC, like other cost allocation approaches?The chief executive's salary stays unassigned in ABC. What are such costs termed?Why did indirect costs rise relative to direct costs in modern factories?How does ABC assign costs, rather than using broad arbitrary percentages?