Day: July 18, 2021

Production overhead expenditure in a period totalled £102,660 compared with a budget of £105,270.

Direct labour hours are used to absorb production overheads.

8,700 direct labour hours were worked in the period and production overhead was over-absorbed by £1,740.

What was the production overhead absorption rate per direct labour hour?

Select ONE answer:

1. £11.60
2. £11.80
3. £12.00
4. £12.10 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct 
4. Not correct

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