快速查题-ACCA英国注册会计师试题

Calculate the figure for over/(under) absorption of production overheads for Period 3 

$ _____over/under 

 When Solo compares their profits reported under absorption costing and marginal costing during a period when the level of inventory increased:  

Absorption costing profits will be higher and closing inventory valuations lower than those under marginal costing.  

Absorption costing profits will be higher and closing inventory valuations higher than those under marginal costing.  

Marginal costing profits will be higher and closing inventory valuations lower than those under absorption costing.  

Marginal costing profits will be higher and closing inventory valuations higher than those under absorption costing. 

How is an overhead absorption rate calculated? 

Over-absorption means that the overheads charged to the cost of sales are greater than the overheads actually incurred.  

List as many possible bases of absorption (or 'overhead recovery rates') as you can think of. 

Using the information in, and the results of, the question on page 7, determine budgeted overhead absorption rates for each of the production departments using appropriate bases of absorption. 

The total production overhead expenditure of the company in the questions above was $176,533 and its actual activity was as follows.  

                                                                     Machine shop A                   Machine shop B                  Assembly 

Direct labour hours                                         8,200                                          6,500                             21,900 

Machine usage hours                                    7,300                                         18,700                                 –-- 

Required 

Using the information in and results of the previous questions, calculate the under- or over-absorption of overheads. 

 Actual overheads cost $180,000 and 40,000 machine hours were worked.