Perth Ltd has been using an overhead cost rate of £5.60 per machinehour. During the year overheads of £275,000 were incurred and 48,000machine hours worked. Therefore, overheads wereA) Under-recovered by £7,600B) Over-recovered by £6,200by £7,600C) Over-recoveredD) Under-recoveredby £6,200

Incurred cost = £275,000Machine hours work = 48,000 Overhead cost rate = £5.60…

Answered: . During the year ove hine hours…

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. During the year ove hine hours worked. ) Under-recovered b ) Over-recovered by C) Over-recovered by

Principles of Accounting Volume 2

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Chapter6: Activity-based, Variable, And Absorption Costing

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Problem 2EB: Boarders estimates overhead will utilize 160,000 machine hours and cost $80,000. It takes 4 machine...

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Question

Perth Ltd has been using an overhead cost rate of £5.60 per machine
hour. During the year overheads of £275,000 were incurred and 48,000
machine hours worked. Therefore, overheads were
A) Under-recovered by £7,600
B) Over-recovered by £6,200
by £7,600
C) Over-recovered
D) Under-recovered
by £6,200

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