Question
27/5. Which of the following statements about overhead absorption rates (OAR) is / are true? ( 1 ) They are usually determined in advance for
27/5. Which of the following statements about overhead absorption rates (OAR) is / are true?
( 1 ) They are usually determined in advance for each given period
( 2 ) They are used to control overhead costs
( 3 ) They are used to plan production schedules
( 4 ) They are usually based on actual data for a given period
A. ( 1 ) only
B. ( 4 ) only
C. ( 1 ) and ( 4 )
D. ( 2 ) and ( 3 )
32./5 Slot Ltd, a manufacturer of vending machines, only makes machines to order and uses job costing. Slot Ltd absorbs overheads based on direct labour cost.
Data for the last month of its financial year when only two machines were in production are:
Machine 1 | Machine 2 | |
Opening work in progress | 72,400 | 16,400 |
Labour for month | 14,200 | 15,800 |
Material added in month | 0 | 46,600 |
Machine 2 was completed during the month, during which Slot Ltd's budgeted overheads (which were the same as actual overheads) were 85,200
What was the value of closing work in progress at the end of the month
A. 86,600
B. 126,928
C. 165,400
D. 250,600
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