Question

Factory overheads are absorbed at 20% of direct wages. Direct wages = ₹1,00,000, actual overheads = ₹22,000. What is the overhead variance?

A ₹2,000 over-absorbed
B ₹2,000 under-absorbed
C Nil
D ₹20,000 over-absorbed
E ₹22,000 under-absorbed
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