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Over-absorbed overheads occur when
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8.4 Which of the following statements about predetermined overhead absorption rates are true ? (i) Using a predetermined absorption rate avoids fluctuations in unit costs caused by abnormally high or low overhead expenditure or activity levels (ii) Using a predetermined absorption rate offers the administrative convenience of being able to record full production costs sooner (iii) Using a predetermined absorption rate aviods problem of under/over absorption of overheads because a constant overhead rate is available.
7.9 A company had 30 direct production employees at the beginning of last year and 20 direct production employees at the end of the year. During the year, a total of 15 direct production has left the company to work for a local competitor. The labour turnover rate for last year was:
7.7 Which of the following statements is/are true about group bonus schemes ? (i) Group bonus schemes are approprtate when increased output depends on a number of people all making extra effort (ii) With a group bonus scheme, it is easier to award each individual’s performance (iii) Non-production employees can be rewarded as part of a group incentive scheme
7.6 Employee A is a carpenter and normally works 36 hours per week. The standard rate of pay is $3.60 per hour. A premium of 50% of the basic hourly rate is paid for all overtime hours worked. During the last week of October, Employee A worked for 42 hours. The overtime hours worked were for the following reasons: Maching breakdown: 4 hours To complete a special job at the request of a customer 2 hours How much of Employee A’s earnings for the last week of October would have been treated as direct wages ?
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