A company uses a predetermined overhead recovery rate based on machine hours. Budgeted factory overhead for a
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A company uses a predetermined overhead recovery rate based on machine hours. Budgeted factory overhead for a year amounted to £720,000, but actual factory overhead incurred was £738,000. During the year, the company absorbed £714,000 of factory overhead on 119,000 actual machine hours.
What was the company’s budgeted level of machine hours for the year?
(a) 116,098
(b) 119,000
(c) 120,000
(d) 123,000
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