Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business has given the following costing figures for its production departments. Machining: total production overheads $180\,000$, machine hours $65\,000$, labour hours $42\,000$. Assembly: total production overheads $260\,000$, machine hours $38\,000$, labour hours $76\,000$. What overhead absorption rate would be appropriate for each department?

  • Amachining $2.77$, assembly $3.42$
  • Bmachining $2.77$, assembly $6.84$
  • Cmachining $4.29$, assembly $3.42$
  • Dmachining $4.29$, assembly $6.84$

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