FL uses an absorption costing system. The overhead absorption rate for production overheads is $8.60 per direct labour hour.
Budgeted production overhead costs for the year were $473,000 and actual costs incurred were $468,000. 56,000 labour hours were used.
Which ONE of the following statements is correct?
A . Overheads were under-absorbed by $5,000
B . Overheads were over-absorbed by $8,600
C . Overheads were under-absorbed by $8,600
D . Overheads were over-absorbed by $13,600
Answer: D