Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

P Limited applies an overhead absorption rate of $\$15$ for each machine hour, calculated from budgeted machine hours of $8000$ per month. During July, production used $8500$ machine hours, and overheads were under-absorbed by $\$16\,500$. Calculate the actual overheads for July.

  • A$103\,500$
  • B$111\,000$
  • C$136\,500$
  • D$144\,000$

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