Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business allocates its fixed overheads on the basis of direct labour hours. The information below is given. overheads: actual $600000$, budgeted $508000$ labour hours: actual $14300$, budgeted $12700$ Which statement is correct?

  • AOverheads were over absorbed by $28000.
  • BOverheads were under absorbed by $28000.
  • COverheads were over absorbed by $92000.
  • DOverheads were under absorbed by $92000.

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