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Hello
My first time here.Can you please explain me the answer for question 8 of the chapter 9 exam.
My doubt is about why the correct answer assumes that there is an over absorbed instead of a under absorbed overhead costs if the budget fixed overhead costs are lower than the actual.Thanks
Quote:answer for question 8 of the chapter 9 exam?You also have to let other students know, what book.. are you talking about OpenTuition F2 course notes? BPP Text? etc??
If you meant, opentuition notes. did you watch relevant lectures?
Yes, I’m talking about opentuituion notes.
I’m not in the possession of all the study material. However I still want to go forward with the study and based on the lecture from opentuituion notes I didn’t understand this point.
Thank you for your attentionUnder/Over – absorption does not arise if budgeted overheads do not equal actual overheads but the comparison is between absorbed overheads and actual overheads. in that question actual overheads equal budgeted overheads= $120 000 and absorbed overheads were $138 000 so there was an over-absorption of $18 000.
try to aplly the NOPU rule in your next questions
Negative = Over
Positive = Under when using the formula {ACTUAL minus ABSORBED}
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