ACCA MA · Chapter 6 · Question 11 of 11
A job uses 12 machine hours in Department X, which absorbs overheads at $22 per machine hour, and 30 direct labour hours in Department Y, which absorbs overheads at $9 per labour hour. What is the total overhead absorbed by the job?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $534
Explanation
Department X: 12 x 22 = $264. Department Y: 30 x 9 = $270. Total = $534. Applying the rates to the wrong departments' hours gives 12 x 9 + 30 x 22 = $768.
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