Budgeted fixed overheads = $650,000 Expected production level = 2,500 units Actual production = 1,000 units Actual fixed overheads = $200,000 Which of the following is true? a) Over absorption of overheads is equal to $200,000 b) Under absorption of overheads is equal to $60,000. This reduces profits. c) Over absorption of overheads is equal to $60,000 d) All of the options are wrong.

Budgeted fixed overheads = $650,000 Expected production level = 2,500 units Actual production = 1,000 units Actual fixed overheads = $200,000 Which of the following is true? a) Over absorption of overheads is equal to $200,000 b) Under absorption of overheads is equal to $60,000. This reduces profits. c) Over absorption of overheads is equal to $60,000 d) All of the options are wrong.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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