A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2023 · Q271 Mark

A business produces two types of product, P and Q, for the month of January. Overheads are absorbed using direct labour hours. The production details are as follows: P Q units manufactured and sold 5000 2000 direct labour hours per unit 1.5 1 Direct costs for the month were $23750. The fixed overheads were $6500. What was the overhead absorption rate per hour?

A$0.68

B$2.50

C$3.18

D$3.39

✓ Correct answer

A: $0.68

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2023 Paper 1 Variant 2, question 27.

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