A business absorbs overheads on a machine hour basis, which were budgeted at 12,250 machine hours with overheads of £147,000. Actual results were 9,870 hours with actual overheads of £154,645. Calculate the over or under recovery.
A) Over recovery of £36,205
B) Over recovery of £7,645
C) Under recovery of £7,645
D) Under recovery of £36,205

Question

Quizplus · Accepted Answer

Overheads were under recovered by £36,205 (12,250 x £147,000 - 9,870 x £154,645)

A Business Absorbs Overheads on a Machine Hour Basis, Which