Page 20 - Manac Costing Test 1 class slides - 2. Variable And Absorption Costing
P. 20
COSTING
Costing variances – example 1
At beginning of period:
Allocation rate = Budgeted overhead/ Normal capacity
= 200 000 / 20 000 units
Units, machine
= R10 per unit hours, labour
hours, etc.
During period:
Absorbed overhead = Allocation rate x actual production
= R10 x 21 000 units
= R210 000
20
