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What is the estimated overhead absorption rate

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Reference no: EM132972708

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                                683850
Direct labour                                   552400
Direct expenses                                 92000
Production overheads                      888700
Selling and administrative overheads  302450

Problem 1: Machine hours for the year are estimated at 863 000. 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: EM132972708

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