Accounting Multiple Choice Question – 5 February 2022

A manufacturing business has provided the following information.

• budgeted labour hours 12 000
• budgeted overhead absorption rate £7.50 per labour hour
• actual overhead cost £101 250
• actual labour hours 15 000

What is the over or under absorption of overheads?

Select ONE answer:

1. £11 250 under absorbed
2. £11 250 over absorbed
3. £20 250 under absorbed
4. £20 250 over absorbed

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 2

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

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