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    Question

    In a manufacturing company, budgeted production is

    10,000 units and budgeted fixed overheads are ₹5,00,000. If actual output is 12,000 units, what is the fixed overhead volume variance?
    A ₹1,00,000 Favourable Correct Answer Incorrect Answer
    B ₹1,00,000 Adverse Correct Answer Incorrect Answer
    C ₹0 Correct Answer Incorrect Answer
    D ₹50,000 Favourable Correct Answer Incorrect Answer

    Solution

    Fixed OH rate = ₹5,00,000 / 10,000 = ₹50 Variance = (12,000 – 10,000) × ₹50 = ₹1,00,000 Favourable

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