QUESTION 2 A business absorbs its fixed production overhead on the basis of direct labour hours. The budgeted direct labour hours for the week, were 4 200. During that week 4 050 direct labour hours were worked and the production overhead incurred was N$16 700. The overhead was under-absorbed by N$1 310.

REQUIRED: 1. Compute the overhead absorption rate that was used during the week. 2. Calculate the estimated production overhead for the week.