A-LevelAccountingAbsorption costingOct/Nov 2023Paper 1 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
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The correct answer is A. This question tests the candidate's understanding of absorption costing within the Accountingsyllabus. The examiner's mark scheme requires...
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