A cost-center schedule with a stated base and an absorption difference

A fictional manufacturer supplies a classroom cost-center schedule with budgeted production overhead of forty-eight thousand currency units and budgeted machine activity of one thousand six hundred hours. A job uses direct materials of four hundred, direct manufacturing labor of two hundred fifty and four machine hours. Separate material overhead is charged at twenty percent of direct material cost; the machine-hour production overhead does not include that material overhead, so there is no intended double count. The organization later records total actual machine activity of one thousand five hundred hours and actual production overhead of forty-seven thousand. The accountant must compare actual overhead with absorbed overhead before deciding how a difference is treated under the exercise. No administration, selling, tax or inventory-valuation policy is supplied, and the schedule is an internal costing model.