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HI John,
can you solve this for me
An architectural practice recovers overheads on the basis of chargeable hours spent on each client. Budgeted overheads for the last period were $195,000. Actual chargeable hours were 4,000 and overheads were over-absorbed by $6,000. Actual overheads were $194,000. What was the budgeted overhead absorption rate per hour?
? $47 per hour
? $48.50 per hour
? $48.75 per hour
? $50 per hourWhat are you attempting a question for which you do not have an answer? You should be using a Revision Kit from one of the ACCA Approved Publishers – it has answers (and explanations) 🙂
If the overheads were over-absorbed, then then the standard overheads for the 4,000 hours actually worked are 194,000 – 6,000 = $188,000. So the standard absorption rate is 188,000 / 4,000 = $47 per hour.
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