A company had an under recovery of £200,000 with a budgeted overhead of £1,000,000. If its estimated overhead hours were 20,000 and its actual overhead hours were 22,000, calculate the actual overhead cost.
A) £1,300,000
B) £800,000
C) £1,200,000
D) £1,100,000

Question

Quizplus · Accepted Answer

Under recovery of £200,000 means that the actual overhead cost is £200,000 more than the budgeted overhead of £1,000,000. Therefore, the actual overhead cost is £1,200,000.

A Company Had an Under Recovery of £200,000 with a Budgeted