A-LevelAccountingTraditional costing methods9706/12 · Feb/Mar 2021 · Q241 Mark

In March, a company's overhead absorption rate was $2 per machine hour. In April this rate increased. What had increased in April causing the change in the overhead absorption rate?

Acost of insurance for the factory

Bhourly pay rate of production workers

Cnumber of actual machine hours worked

Dnumber of budgeted machine hours

✓ Correct answer

A: cost of insurance for the factory

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2021 Paper 1 Variant 2, question 24.

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