Question No 9:
A company uses the repeated distribution method to reapportion service department costs. The use of this method suggests
A. The company’s overhead rates are based on estimates of cost and activity levels, rather than actual amounts
B. There are more service departments than production cost centres
C. The company wishes to avoid under- or over-absorption of overheads in its production cost centres
D. The service departments carry out work for each other
Answer: D
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