Assume that Mr A operates one organisation and Mr B operates another one. Both organisations employ the

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Assume that Mr A operates one organisation and Mr B operates another one. Both organisations employ the same accountant on a part time basis, and she is consistent in the way she applies her accounting skills and knowledge. The overhead absorption rate derived for Mr A’s organisation is radically different to the value of the overhead absorption rate for Mr B’s organisation. Given that both organisations operate within the same sector of the economy, can we conclude that one organisation is more efficient than the other one?

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