CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA17-BA2-1 exam

Question #: 72
Topic #: 1

A company uses an integrated accounting system and absorbs production overhead using a predetermined rate of $6 per machine hour.

Last period a total of 25,500 machine hours were worked and the actual production overhead incurred was $158,000.

The accounting entries for the absorption of production overhead for the period would be:

ADebit: production overhead control account $158,000
Credit: work in progress control account $158,000

BDebit: production overhead control account $153,000
Credit: work in progress control account $153,000

CDebit: work in progress control account $158,000
Credit: production overhead control account $158,000

DDebit: work in progress control account $153,000
Credit: production overhead control account $153,000

Show Suggested Answer

Suggested Answer: C

by Elfriede at May 29, 2024, 03:59 AM

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Jacqueline

8 days ago

But the actual production overhead incurred was $158,000, so it should be debited to production overhead control account.

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Option D seems to be the correct answer. The predetermined rate is $6 per machine hour, and with 25,500 machine hours worked, the total absorption should be $153,000, which matches the entry in option D.

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Kanisha

12 days ago

I disagree, I believe the answer is B.

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Jacqueline

15 days ago

I think the answer is A.

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CIMA Exam CIMAPRA17-BA2-1 Topic 1 Question 72 Discussion

Contribute your Thoughts:

Jacqueline

Pauline

Kanisha

Jacqueline