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Machine hours are used to absorb overheads in a production cost centre. Overheads allocated and apportioned to the cost centre are:
Allocated $ 13,122
Apportioned $ 7,920
Reapportioned from service cost centres $ 2,988216,000 units of product are manufactured at a rate of 120 units per machine hour.
What is the overhead absorption rate per machine hour?
A. $7·29
B. $11·13
C. $11·69
D. $13·35Please help me with this ques
Total overheads to be absorbed = 13122 + 7920 + 2988 = 24030
Total machine hours needed = 216,000/120 = 1800
OAR/hour = 24030/1800 = 13.35.
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