To whom it may concern,
The following question requires your kind attention.
A cost centre is charged with the following actual overhead costs for a period:
Allocated costs: $ 28720
Apportioned costs: $10260
Overheads were absorbed in the cost centre over the period on 1760 actual labour hours at a predetermined absorption rate of $ 21.50 per hour. Actual labour hours worked in the period were 90 hours above budget. What was the over/under absorption in the cost centre?
Your help is very much appreciated.
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Question regarding over/under absorption
when u want to find over/under absorbed.first u need actual cost incurred the question have give you the cost just sum up the allocating and apportioned cost.second u need a predetermined overhead absorbed so u need actual labour hour and the predetermine oar.u already have both information.just take the actual labour hour times with the oar.now takethe actual cost incurred minus with the predetermine overhead absorbed .apply nopu if negative over absorbed if positive its under absorbed.
A cost centre is charged with the following actual overhead costs for a period:
Allocated costs: $ 28720
Apportioned costs: $10260
Overheads were absorbed in the cost centre over the period on 1760 actual labour hours at a predetermined absorption rate of $ 21.50 per hour. Actual labour hours worked in the period were 90 hours above budget. What was the over/under absorption in the cost centre?
Your help is very much appreciated.
11y ago#3The overheads absorbed are 1760 hours x $21.50 = 37840
The actual overheads are 28720 + 10260 = 38980
They have therefore under-absorbed by the difference.
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