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Question 1: A company budgeted to produce 3,000 units of a single product in a period at a budgeted cost per unit, built up as follows: Direct cost $12, Variable overhead $5, Fixed overhead $9 and total cost per unit $26. In the period covered by the budget: Actual sales were 3,500 units and inventory levels decreased by 300 units. Actual fixed overhead expenditure was 5% above that budgeted. Other costs were as budgeted per unit. Determine which of the following statements is correct.
Option A. Total overheads in the period were $1,450 over-absorbed
Option B. Total overheads in the period were $450 over-absorbed
Option C. Total overheads in the period were $1,450 under-absorbed
Option D. Total overheads in the period were $450 under-absorbed
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