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    Question

    Which cost method would capitalise fixed manufacturing

    overheads per unit?
    A Marginal costing (variable costing) --- does not capitalise fixed OH Correct Answer Incorrect Answer
    B Absorption costing --- includes fixed overheads in product cost Correct Answer Incorrect Answer
    C Direct costing only Correct Answer Incorrect Answer
    D Standard costing never includes OH Correct Answer Incorrect Answer

    Solution

    Absorption costing allocates a portion of fixed manufacturing overheads to each unit of product, thereby capitalizing them into inventory cost.

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