(a) Company B uses a traditional absorption costing system and absorbs production overheads on the basis of standard machine hours. The following are budgeted and actual information applied in its last accounting period:

Budget Actual

Production overhead RM750,000 RM725,000

Machine hours 125,000 120,000

Units produces 50,000 50,000

Required:

Calculate the following:

(i) Budgeted overhead absorption rate(1 mark)

(ii) Actual overhead rate(1 mark)

(iii) Actual overhead absorbed(2 marks)

(iv) Production overhead under / over-absorbed(2 marks)