Calculate the actual fixed production overheads for a company which over-absorbed GHC6000 of its overhead cost duringa period with an absorption rate of GHC8 per labour hour, where the budgeted and actual labour hours are 5000hours and4500hours respectivelyOA. GHC40000B. GHC46000C. GHC30000D. GHC36000Reset Selection

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Description: Calculate the actual fixed production overheads for a company which over-absorbed GHC6000 of its overhead cost duringa period with an absorption rate of GHC8 per labour hour, where the budgeted and actual labour hours are 5000hours and4500hours resp

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Business

Accounting

Calculate the actual fixed production overheads f

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...

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A Company establishes the following standards for the costs of one unit of its product. The standard production overhead costs per unit are bascd on direct-labor hours. Calculation for standard per unit cost is as follows: Std Cost Std Qty 3.00 kg | Direct Material Direct Labor Variable Overhead Fixed Overhead* |Total *based on practical capacity of 20,000 direct-labor hour per month Std Price/Rate $ 8.25 per kg $ 10.00 per hour $ 10.00 per hour $ 7.50 per hour 24.75 $ 20.00 2.00 hour $ 20.00 2.00 hour 15.00 2.00 hour 79.75 During December 2020, the Company purchased 30,000 kg of direct material at a total cost of $246,000. The total wages for December were $260,000, 75% of which were for direct labor. The Company manufactured 9,500 units of product during December 2020, using 28,400 kg of the direct material purchased in December and 18,900 direct-labor hours. Actual variable and fixed overhead cost were $200,000 and $150,000, respectively. The scheduled production for the month was…
MPX Resources uses absorption costing with a predetermined hourly fixed overhead absorption rate. For the year ended 31 December 2023, the following situations arose: 1. Actual overheads were less than the budgeted expenditure; and 2. Actual hours worked were less that the budgeted hours used to set the predetermine overhead absorption rate. Required: Which of the following statements is correct? OA. Both situations would cause the overheads to be over-absorbed. OB. Both situations would cause the overheads to be under-absorbed. OC. Situation 1 would cause the overheads to be under-absorbed and situation 2 would cause the overheads to be over- absorbed. OD. Situation 1 would cause the overheads to be over-absorbed and situation 2 would cause the overheads to be under- absorbed.
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