A manufacturing business uses direct labour hours to calculate its overhead absorption rate.
What are the causes for over-absorption of overhead?
1 More labour hours have been used than budgeted.
2 More products have been produced than budgeted.
3 More products have been sold than budgeted.
1 )
1, 2 and 3
1 and 2 only
3 )
1 and 3 only
4 )
2 and 3 only
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