Page 168 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 168
Chapter 7
Test your understanding 7
B
Overhead incurred $694,075
Less under-absorption ($35,000)
Overhead absorbed $659,075
OAR = 659,075/32,150 = $20.50
Test your understanding 8
A
The production overhead is first collected in the overhead account. It is then
absorbed into production costs by debiting the work in progress account using
the predetermined overhead absorption rate.
Test your understanding 9
C
Under-absorbed overhead is transferred from the production overhead account
as a debit to the statement of profit or loss.
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