Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A company applies a machine hour basis when absorbing its overheads. The information below relates to its most recent period. Overheads: actual $299000$, budgeted $350000$. Machine hours: actual $46000$, budgeted $50000$. Which statement about overheads is correct?

  • AThey were over absorbed by $23000$.
  • BThey were under absorbed by $23000$.
  • CThey were over absorbed by $51000$.
  • DThey were under absorbed by $51000$.

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