Identify one suitable apportionment basis that a business might use for: (i) rent and rates, (ii) machinery depreciation, (iii) electricity for machinery.
Complete the table to display the apportionment of budgeted overhead costs for the year ending 30 September 2021.
Calculate, to two decimal places, an overhead absorption rate for each production department using an appropriate basis.
Calculate the overhead over-absorption or under-absorption for each department for the year ending 30 September 2021.
Prepare a statement showing the total selling price Hayden quoted to the customer.
Advise Hayden on whether he ought to use one factory-wide overhead absorption rate. Justify your answer.
Explain two consequences that over-absorption of overheads may have for a business.