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Sir / Madam, i don’t understand how can get the answer.
A company uses absorption costing with a predetermined hourly overhead absorption rate. The following situations arose last month :
i) Actual hours worked exceeded planned hours.
ii)Actual overhead expenditure exceeded planned expenditure.Which of the following statement is correct?
Answer : Situation (i) would cause overheads to be under absorbed and Situation (ii) would cause overheads to be over absorbed.
Thank you.
If you want me to answer then you should ask in the Ask the Tutor Forum – this forum is for students to help each other.
(but what you have asked is explained in my free lectures – the lectures are a complete free course for Paper F2 and cover everything needed to be able to pass the exam well.)
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