Canberra has established the following information regarding fixed overheads for the coming month: Budgeted information:
Fixed overheads..........................£180,000
Labour hours.....................................3,000
Machine hours.................................10,000
Units of production............................5,000
Actual fixed costs for the last month were £160,000.
Canberra produces many different products using highly automated manufacturing processes and absorbs overheads on the most appropriate basis.
What will be the predetermined overhead absorption rate?
(a) £16
(b) £18
(c) £36
(d) £60