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Budget fix overheads – $ 216 000
Budget labour hours – 144 000
Actual fixed overheads – $235 200
Over absorption fixed overheads – $16 800
How many labour hours were actually worked.1) 216000/144000= 1.5
2) 235200/1.5= 156800
3) 16800/1.5= 11200
11200 + 156800 = 168000 hours ?Why we should add 11200 instead of subtract ? We over- absorbed, doesn’t it mean that we need subtract this hours , because it over- absorbed hours ?
Best regards , Tod
o.a.r x actual hours= absorbed hour
1.5 x (unknown)= 235200+16800=252000
actual overhead= 235200
therefore inorder to get your answer divide 252000/1.5=168000hope this helps
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