Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

The budgeted and actual figures shown below are available. Budgeted overheads: $460\,000; actual overheads: $420\,000. Budgeted labour hours: 28\,750; actual labour hours: 21\,000. Budgeted machine hours: 9\,200; actual machine hours: 7\,000. Which overheads absorption rate would be the most appropriate for the company?

  • A$16$ per labour hour
  • B$20$ per labour hour
  • C$50$ per machine hour
  • D$60$ per machine hour

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