The following information is available for two production cost centres in a factory for a period:

	Cost centre X	Cost centre Y
Budgeted costs	$28,556	$54,264
Budgeted hours	1,210 machine hours	6,460 labour hours
Predetermined absorption rate	$2360 per machine hour	$840 per labour hour
Actual costs	$29,609	$52,567
Actual hours	1,235 machine hours	6,395 labour hours

Required:

1. Calculate the over or under absorption of overhead for the period in each cost centre.
2. Explain two advantages of using predetermined, as opposed to actual, overhead absorption rates.
3. Journal entries for over-applied & under-applied.
4. Which statement is false?
5. Using a single plantwide overhead allocation rate is the simplest method of allocating overhead costs.
6. An allocation system that uses departmental overhead allocation rates is more refined than one that uses a plantwide overhead allocation rate.
7. Allocation focuses on indirect costs.
8. The predetermined overhead allocation rate is based on actual costs