Hell Sir .
Fixed manufacturing overheads are absorbed
using a predetermined overhead rate based on the number of machine hours used. Each unit of
item is expected to take one and a half machine hours and one and a half labour hours.
Budgeted fixed manufacturing overheads for the year ending 31 December 2015 is R3 276 000.
Actual machine hours per unit 1.5 hours
Actual labour hours per unit 1.5 hours
Budgeted normal production per month 9 100 units
How to determine fixed absorption rate here?
Ask the Tutor ACCA MA
Absorption costing and variable costing
9y ago#1The absorption rate is the budgeted fixed overheads divided by the budgeted hours.
You know what the total budgeted hours are.
You know the budgeted production and the standard time per unit, and so you can calculate the budgeted hours.
(I don't understand why you are attempting questions for which you do not have answers - you should be using a Revision Kit from one of the ACCA approved publishers. The contain lots of exam standard questions, together with answers and workings).
It will help you to watch my free lectures - they are a complete free course and cover everything needed to be able to pass paper F2 well.
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