Mathematics · Cost Accounting - Overhead Over/Under Absorption
Bailey Co 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, the actual total overhead expenditure 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 $7,000
- 2over absorbed by $3,875
- 3under absorbed by $7,000
- 4under absorbed by $3,875✓
Correct answer
under absorbed by $3,875
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