Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business allocates its overheads using machine hours. The information below is given. Overheads (actual): $564000$ Overheads (budgeted): $560000$ Machine hours (actual): $6700$ Machine hours (budgeted): $7000$ By how much are overheads under or over-absorbed?

  • Aover-absorbed by $4000$
  • Bunder-absorbed by $4000$
  • Cover-absorbed by $28000$
  • Dunder-absorbed by $28000$

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