A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2020 · Q251 Mark

A business absorbs its fixed overheads using direct labour hours. The following information is provided. actual budgeted overheads $600 000 $508 000 labour hours 14 300 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 $92 000.

✓ Correct answer

B: Overheads were under absorbed by $28000.

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2020 Paper 1 Variant 2, question 25.

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