Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A manufacturing business has supplied the following figures: budgeted labour hours $12000$, budgeted overhead absorption rate $7.50$ per labour hour, actual overhead cost $101250$, actual labour hours $15000$. Calculate the over or under absorption of overheads.

  • A$11250$ under absorbed
  • B$11250$ over absorbed
  • C$20250$ under absorbed
  • D$20250$ over absorbed

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