Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business applies an overhead absorption rate of $\$20$ for each direct labour hour. For April, budgeted direct labour hours were $6000$ and actual direct labour hours came to $6100$. The month’s overheads were under absorbed by $\$3000$. What was the amount of actual overheads in April?

  • A$\$117000$
  • B$\$119000$
  • C$\$123000$
  • D$\$125000$

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