A company uses an overhead absorption rate (OAR) of K3.50 per machine hour, based on 32,000 budgeted machine hours for the period. During the same period, the actual total overhead expenditure amounted to K108,875 and 30,000 machine hours were recorded on actual production.

By how much was the total overhead under or over absorbed for the period?

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Heres how to calculate the under or overabsorbed overhead for the company Calculate the Budgeted Ove... View the full answer