The accountant for Brilliant Tools Ltd applies overhead based on machine hours. The budgeted overhead and machine hours for the year are - 1,30,000…
CA Intermediate · Cost and Management Accounting · MTP · May 2025
The accountant for Brilliant Tools Ltd applies overhead based on machine hours. The budgeted overhead and machine hours for the year are - 1,30,000 and 8,000 hours, respectively. The actual overhead and machine hours incurred were - 1,37,500 and 10,000 hours. What is the amount of over/under absorbed overhead for the year?
Suggested Answer and Working Notes:
Correct Answer: Option (A)
Over absorbed by 25,000
Topics: Budgets and Budgetary Control, Overheads - Absorption Costing Method
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