A-LevelAccountingTraditional costing methods9706/12 · Feb/Mar 2024 · Q271 Mark

X Limited has budgeted monthly overheads of $125 000. Its overhead absorption rate is $5 per machine hour. In July there was an under-absorption of overheads of $1000. Which changes from budgeted data caused this to happen?

Aoverheads: $500 higher, machine hours: 100 hours less

Boverheads: $500 lower, machine hours: 100 hours more

Coverheads: $750 higher, machine hours: 50 hours more

Doverheads: $750 lower, machine hours: 50 hours less

✓ Correct answer

A: overheads: $500 higher, machine hours: 100 hours less

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2024 Paper 1 Variant 2, question 27.

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