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Shakes co absorb production overheads at the rate of $1.20 per machine hour.
The monthly date for April 20×6 is as follow:
Production overheads $20,500
Machine hours 20,200
Which of the following amounts would be shown as a DEBIT entry on the production overhead account?
1.Production overheads absorbed $24,240
2. Production overheads incurred $20,500
3.Over absorption of production overheads $3,740Doubt:
Why the answer is only option 3 not option 2 also
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