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What is the estimated overhead absorption rate

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Reference no: EM132971474

Nagri Machine Productions Limited produces a single product. The company's management accountant has budgeted the following totals in respect of the 20X7 financial year:

£

Direct materials 683 850

Direct labour 552 400

Direct expenses 92 000

Production overheads 888 700

Selling and administrative overheads 302 450

Machine hours for the year are estimated at 863 000.

Problem 1: What is the estimated overhead absorption rate for 20X7, based on machine hours (to the nearest penny)?

a. £1.49

b. £1.14

c. £1.03

d. £1.38

Reference no: EM132971474

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