Accounting · Management Accounting
A company uses an overhead absorption rate of $3.50 per machine hour, based on 32,000 budgeted machine hours for the period. During the same period, actual total overhead costs amounted to $108,875 and 30,000 machine hours were recorded on actual production. By how much was the total overhead under or over absorbed for the period?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Over absorbed by $3,875
- 2Under absorbed by $7,000
- 3Under absorbed by $3,875✓
- 4Over absorbed by $7,000
Correct answer
Under absorbed by $3,875
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