Kopo manufactures calculators. The information below pertains to April, its first month of operation: Standard cost per calculator Actual cost per calculator Direct materials R20 R16 Direct labour R15 R21 Production overheads R35 R36 Total cost per calculator R70 R73 Kopo had budgeted for 4 500 calculators, but during April, only 4 000 calculators were manufactured. There was no inventory of calculators at the beginning of April and no sales occurred during April. What is the over- or under-absorption of overheads under standard costing? a. R4 000 (over) b. R4 000 (under) C. R4 500 (under) d. R4 500 (over)
Kopo manufactures calculators. The information below pertains to April, its first month of operation: Standard cost per calculator Actual cost per calculator Direct materials R20 R16 Direct labour R15 R21 Production overheads R35 R36 Total cost per calculator R70 R73 Kopo had budgeted for 4 500 calculators, but during April, only 4 000 calculators were manufactured. There was no inventory of calculators at the beginning of April and no sales occurred during April. What is the over- or under-absorption of overheads under standard costing? a. R4 000 (over) b. R4 000 (under) C. R4 500 (under) d. R4 500 (over)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Kopo manufactures calculators. The information below pertains to April, its first month of operation:
Standard cost per calculator Actual cost per calculator
Direct materials R20 R16
Direct labour R15 R21
Production overheads R35 R36
Total cost per calculator R70 R73
Kopo had budgeted for 4 500 calculators, but during April, only 4 000 calculators were manufactured. There was no
inventory of calculators at the beginning of April and no sales occurred during April.
What is the over- or under-absorption of overheads under standard costing?
a.
R4 000 (over)
b.
R4 000 (under)
C.
R4 500 (under)
d.
R4 500 (over)
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