batch cost

“The following items may be used in costing batches.
(i) Actual material cost
(ii) Actual manufacturing overheads
(iii) Absorbed manufacturing overheads
(iv) Actual labour cost

Which of the above are contained in a typical batch cost?”

Solution: “The actual material and labour costs for a batch (i and iv) can be determined.
Actual manufacturing overheads cannot be determined we need the allocation and apportionment of each item of overhead expenditure, and the subsequent calculation of a predetermined overhead absorption rate. So, (ii) is incorrect and (iii) is correct.”

Hello tutor,

For the question above, does it mean that for batch cost, we will not try to calculate the actual production OH but only absorbed OH? So in that case, how can the total cost of each batch be correct before it can be divided by total units to achieve unit cost for each batch item?

Thank you tutor!