Laing Ltd uses a predetermined overhead rate in applying overheads to product cost on a direct labour cost basis for cost centre A and on a machine hour basis for cost centre B. The following details forecasts for 201X:

-With respect to Laing Ltd the predetermined overhead rate for cost centre B is £7.50 per machine hour.

Question

Laing Ltd uses a predetermined overhead rate in applying overheads to product cost on a direct labour cost basis for cost centre A and on a machine hour basis for cost centre B. The following details forecasts for 201X:

-With respect to Laing Ltd the predetermined overhead rate for cost centre B is £7.50 per machine hour.

Quizplus · Accepted Answer

The question states that Laing Ltd uses a predetermined overhead rate on a machine hour basis for cost centre B and that the rate is £7.50 per machine hour. Therefore, the statement in option A is true.

Laing Ltd Uses a Predetermined Overhead Rate in Applying Overheads