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    Question

    Factory’s budget estimated 10,000 units output; fixed

    overhead budget ₹20 lakh. Actual output 8,000 units. Compute FOVV.
    A ₹4 lakh Adverse Correct Answer Incorrect Answer
    B ₹4 lakh Favourable Correct Answer Incorrect Answer
    C ₹2 lakh Adverse Correct Answer Incorrect Answer
    D ₹2 lakh Favourable Correct Answer Incorrect Answer
    E Nil Correct Answer Incorrect Answer

    Solution

    Standard fixed overhead per unit = ₹20 lakh / 10,000 = ₹200. Actual output 8,000, overhead absorbed = ₹16 lakh. Actual fixed overhead ₹20 lakh; adverse variance ₹4 lakh.

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