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One of the cost centres in a factory is involved in the final stage of production. Budgeted fixed overhead costs for the cost centre for a period were: Apportioned costs $74,610 Allocated costs $98,328. A predetermined machine hour rate is established for the absorption of fixed production overhead into product cost. Budgeted machine hours for the cost centre in the period were 1,900.Actual overheads allocated and apportioned in the period were $173,732. Actual machine hours in the period were 1,950. The predetermined fixed overhead absorption rate is: *
C $91.02
B $88.62
D $93.42
A $39.27Why are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA approved publishers (BPP or Kaplan) – they have answers and explanations.
The budgeted overheads are 74610 + 98328 = 172938
The budgeted machine hours are 1900
Therefore the predetermined absorption rate is 172938/1900 per hour.I do suggest that you watch my free lectures on overheads. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
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