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FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Which of the following is NOT true regarding IAS 2 Inventories?
Fixed production overheads must be allocated to items of inventory on
the basis of the normal level of production
Plant lying idle will lead to a higher fixed overhead allocation to each
unit
The factory management team is a fixed overhead that relates to the
production of inventories
Variable production overheads are allocated to each unit on the basis of
the actual usage of production facilities
Transcribed Image Text:Which of the following is NOT true regarding IAS 2 Inventories? Fixed production overheads must be allocated to items of inventory on the basis of the normal level of production Plant lying idle will lead to a higher fixed overhead allocation to each unit The factory management team is a fixed overhead that relates to the production of inventories Variable production overheads are allocated to each unit on the basis of the actual usage of production facilities
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