alleryStart learning →Fixed overhead Rs 6,00,000; normal capacity 60,000 units; actual 40,000. Absorbed per unit?
ARs 10
BRs 15
CRs 8
DRs 12
Answer & Solution
Correct answer: A. Rs 10
Absorption is on normal capacity, so 6,00,000 / 60,000 = Rs 10 per unit, and the unabsorbed Rs 2,00,000 is expensed.
Keep practising Valuation of Inventories (AS 2)
Browse all Valuation of Inventories (AS 2) questions for CA Inter, or explore more Accounting topics.
Related questions
Which cost may be added to inventory cost as an other cost?Which classification covers goods acquired for trading in AS 2?Which items can be grouped for NRV write-down?When may actual output be used to allocate fixed overheads?Under AS 2, what does normal capacity mean?NRV counts later price changes if they do what?How are maintenance supplies and loose tools awaiting use treated?How is software bought for resale classified under AS 2?