Basic. A company uses a blanket overhead absorption rate of $5 per direct labour hour. Actual overhead expenditure in a period was as budgeted. The under/over-absorbed overhead account for the period...

Basic. A company uses a blanket overhead absorption rate of $5 per direct labour hour. Actual overhead expenditure in a period was as budgeted. The under/over-absorbed overhead account for the period have the following entries: DR ($) CR ($) Production overhead 4000 Profit or loss account 4 000 Which of the following statements is true? (a) Actual direct labour hours were 800 less than budgeted (b) Actual direct labour hours were 800 more than budgeted (c) Actual direct labour hours were 4000 less than budgeted (d) Production overhead was over absorbed by $4000 ACCA F2 Management Accounting