Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business allocates overheads using direct labour hours. The information below is given. Budgeted labour hours: 6600 hours. Actual labour hours: 7100 hours. Budgeted overheads: $75 900. Actual overheads: $74 250. What is the amount of overheads over or under absorbed?

  • A$5625 over
  • B$5625 under
  • C$7400 over
  • D$7400 under

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