Which of the following would not cause either an under or over absorption of overhead?

CS Executive · Cost and Management Accounting · PYQS · December 2020
Which of the following would not cause either an under or over absorption of overhead?
(A) Actual direct labour time per unit being greater than budgeted
(B) Actual cost of direct labour being greater than budgeted
(C) Actual overhead incurred being less than budgeted
(D) The number of units produced being greater than budgeted

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Overheads

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