Question
QRS Ltd has three main departments - casting, dressing and assembly - and for period 3 has prepared the following production overhead budgets for
QRS Ltd has three main departments - casting, dressing and assembly - and for period 3 has prepared the following production overhead budgets for an output level of 110,000 units: Department Casting Dressing Assembly Production overheads 225,000 175,000 93,000 Expected production 7,500 7,000 6,200 hours During period 3, actual results were as follows for an output level of 117,500 units: Department Casting Dressing Assembly Production overheads 229,317 182,875 94,395 Actual production hours 7,950 7,280 6,696 What is the under/over absorption of overheads for the three departments for period 3? (b) Compare and contrast incremental budgeting and zero based budgeting.
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