A Level Accounting (9706)•9706/12/O/N/23
Explanation
Overhead absorption rate = fixed overheads ÷ total direct labour hours
Steps:
- Calculate total DLH for P: 500 units × 1.5 hours/unit = 750 hours
- Calculate total DLH for Q: 2000 units × 1 hour/unit = 2000 hours
- Total DLH = 750 + 2000 = 2750 hours
- Rate = 1.82/hour (direct costs $2350 unused in standard formula)
Not enough information: Standard calculation yields $1.82 (unlisted); unclear role of direct costs or if variable overheads implied.
Final answer: Not enough information.
Topic: Traditional costing methods
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