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Accounting for Production overhead.

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Accounting for Production overhead.

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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  • December 16, 2021 at 1:13 pm #644407
    smrety29
    Participant
    • Topics: 1
    • Replies: 0
    • ☆

    Hello..In Bpp kit 7a.25
    A company uses blanket overhead…..
    The ans is Actual direct labour hour were 800 less than budgeted.
    But in underabsorption case..Actual hour should be more right? I am so confused in it.

    December 16, 2021 at 3:58 pm #644422
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51560
    • ☆☆☆☆☆

    There is no question 7a.25 in the current edition of the BPP Revision Kit 🙁

    However, we amount absorbed is always the actual hours multiplied by the standard overhead cost per hour.

    If they actually work more hours than budgeted they will end up over-absorbing. If they actually work less hours than budgeted they will have under absorbed.

    Have you watched my free lectures on this?

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