The following data are to be used for sub-questions (i) and (ii) below:

Budgeted labour hours ‘ 8500 Budgeted overheads " $148750 Actual labour hours 7928 Actual overheads £146 200

(i) Based on the data given above, what is the labour hour overhead absorption rate?

(a) £17.50 per hour

(b) £17.20 per hour

(c) £18.44 per hour

(d) £18.76 per hour

(ii) Based on the data given above, what is the amount of overhead under- overabsorbed?

(a) £2550 under-absorbed

(b) £2529 over-absorbed

(c) £2550 over-absorbed

(d) £7460 under-absorbed

(3 marks)

CIMA Stage 1