Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

The business uses machine hours as the basis for absorbing overheads. For the most recent quarter, the budgeted and actual figures were as follows. Actual overheads: $118505$ Actual machine hours: $6230$ Budgeted overheads: $126725$ Budgeted machine hours: $6850$ Find the amount by which overheads were over-absorbed or under-absorbed.

  • AOver absorbed by $3250
  • BOver absorbed by $8220
  • CUnder absorbed by $3250
  • DUnder absorbed by $8220

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