overheads absorbed

valentino46

hi all,

wondered if someone would kindly could point me in the right direction with the following:

i have been given the following figures:
7200 direct labour hours @ £6.60
OAR rate of £2.50

firstly ive calculated the overhead absorbed of £18000 (7200 x £2.50)

im then asked to put my figure of £18000 (if calculated correctly!) into a Production Overhead Control Account,
I already have these figures in the account on the debit side:
wages control account £5000
Depreciation £7000
Premises costs £4000
so a total of £16000 on the debit side.
Am i right in thinking that i put my £18000 absorbed into the credit side meaning that i have over absorbed by £2000??

any help would be appreciated gratefully.

thanks

rob

SandyHood

yes and yes

Try the blog
for more detail on this topic

valentino46

thanks sandy,

blogs a great help too

rob