alleryStart learning →Budgeted fixed overhead is Rs 12,000 for a normal 1,000 units. Only 900 units were made. What is the volume variance?
ARs 1,200 adverse
BRs 1,200 favourable
CRs 10,800 adverse
DRs 900 adverse
Answer & Solution
Correct answer: A. Rs 1,200 adverse
Absorbed overhead is 900 x Rs 12 = Rs 10,800, which is Rs 1,200 below budget, so the volume variance is adverse.
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