What was the budgeted level of overheads?

A company operates an absorption costing system. Overheads are absorbed using a pre-determined absorption rate using labour hours. In the period actual labour hours were 10,600, 400 hours below budget. Actual overheads for the period were £234,680 and there was an under-absorption of overheads of £1,480.

What was the budgeted level of overheads?
A . £242,000
B . £233,200
C . £245,072
D . £224,720

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Answer: A