Question

A factory absorbs production overheads at a predetermined rate of ₹25 per machine hour. During the month, 8,000 machine hours were worked. The actual production overheads incurred amounted to ₹2,20,000. Which of the following correctly describes the overhead position?

A Under-absorption of ₹20,000
B Under-absorption of ₹30,000
C Over-absorption of ₹20,000
D Over-absorption of ₹30,000
E No under/over-absorption
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