Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

The information below relates to the production department of a manufacturing company during a period. Overheads are allocated using direct labour hours as the basis. Planned: 96000 direct labour hours, total overhead costs $242880 Actual: 97600 direct labour hours, total overhead costs $253760 What is the over or under absorption of overheads for the period?

  • A$6832 over absorbed
  • B$6832 under absorbed
  • C$10880 over absorbed
  • D$10880 under absorbed

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