A company has two departments in its factory. The details are shown. Machining department: budgeted fixed overheads $180000, budgeted hours 6000. Assembly department: budgeted fixed overheads $90000, budgeted hours 10000. Total budgeted fixed overheads $270000, total budgeted hours 16000. What is the fixed overhead absorption rate per hour in the machining department?

Q: What topic does this question test?

This question tests Costing in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Q: Which exam paper is this question from?

This question appeared in the Cambridge A-Level Accounting Feb/Mar 2022 examination, Paper 1 Variant 2 (9706_m22_qp_12.pdf).

Question

A company has two departments in its factory. The details are shown. Machining department: budgeted fixed overheads $180000, budgeted hours 6000. Assembly department: budgeted fixed overheads $90000, budgeted hours 10000. Total budgeted fixed overheads $270000, total budgeted hours 16000. What is the fixed overhead absorption rate per hour in the machining department?

Oracle Prep · Accepted Answer

The correct answer is C: $30.

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