Day: March 20, 2022

A business has provided the following costing information for its production departments.

                                                                            machining           assembly 

total production overheads £180,000 £260,000
machine hours 65,000 38,000
labour hours 42,000 76,000

What would be a suitable overhead absorption rate for each department?

Select ONE answer:

1. machining £2.77 & assembly £3.42
2. machining £2.77 & assembly £6.84
3. machining £4.29 & assembly £3.42
4. machining £4.29 & assembly £6.84

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 1

1. Correct ==> £180,000 / 65,000 & £260,000 / 76,000
2. Not correct
3. Not correct
4. Not correct

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