Multiple Choice Questions on For the month of April 2019 the following information is provided about overhead expenses in an orga........... for SEBI Grade A ( Officer) Exam Preparation

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Multiple Choice Questions

For the month of April 2019 the following information is provided about overhead expenses in an orga...........

Costing - Phase (I & II) Methods of Costing
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    For the month of April 2019, the following information is provided about overhead expenses in an organization:

    Actual variable overheads: Rs. 6,00,000/-

    Budgeted Variable overheads: Rs. 8,00,000/-

    Budgeted output 1,500 unit

    Actual output 1,300 units

    Actual hours worked 1,800 hours

    Standard time 3 hours per unit

    The variable overhead expenditure variance and variable overhead efficiency variance will be:

    Rs. 2,70,000 adverse, Rs. 3,73,338 favourable (Approx.)

    Incorrect Answer

    Rs. 2,80,000 adverse, Rs. 3,73,338 favourable (approx.)

    Correct Answer

    Rs. 2,70,000 adverse, Rs. 3,73,338 favourable (approx.)

    Incorrect Answer

    None of the above

    Incorrect Answer
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    Explanation:

    Variable overhead expenditure variance= Actual hours worked x standard rate per hour – actual overheads

    1,800 x 177.7778 – Rs. 6,00,000= 2,80,000/- adverse

    Variable overhead efficiency variance= standard time for actual production   x standard variable rate per hour – actual hours worked x standard variable rate per hour.

    1300 x 3 x 177.778 – 1800 x 177.778= 3,73,338 favourable.

    By: Vikas Goyal
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