Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A company allocates overheads on the basis of machine hours. The information below is provided. Budgeted: overheads $200000; machine hours 40000 hours Actual: overheads $240000; machine hours 60000 hours What amount of over- or under-absorption of overheads occurred?

  • A$40000 over
  • B$40000 under
  • C$60000 over
  • D$60000 under

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