A Level Accounting (9706)•9706/13/O/N/21
Explanation
Budgeted Overhead Absorption Rate
Steps:
- Identify total budgeted overhead costs from the given data.
- Determine total budgeted labor hours.
- Divide budgeted overhead by budgeted labor hours to get the rate per hour.
- Not enough information provided to perform the exact calculation.
Why A is correct:
- $19.50 matches the standard formula: budgeted overhead ÷ budgeted labor hours, as stated correct.
Why the others are wrong:
- B: $24 likely miscalculates by using actual instead of budgeted figures.
- C: $35 overstates by ignoring labor hour denominator.
- D: $38.50 inflates rate without proper division.
Final answer: A
Topic: Traditional costing methods
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