Q69 A company uses an overhead absorption rate of N3·50 per machine hour, based on 32,000 budgeted machine hours for the period

Q69 A company uses an overhead absorption rate of N3·50 per machine hour, based on 32,000 budgeted machine hours for the period. During the same period the actual total overhead expenditure amounted to N108,875 and 30,000 machine hours were recorded on actual production. By how much was the total overhead under or over absorbed for the period?
 Under absorbed by N3,875
 Under absorbed by N7,000
 Over absorbed by N3,875
 Over absorbed by N7,000

 

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