Same data: Fixed overhead efficiency variance equals:
A₹6,000 favourable
B₹6,000 adverse
C₹12,000 adverse
D₹0
Answer & Solution
Correct answer: B. ₹6,000 adverse
1. Fixed overhead efficiency variance = (Standard hours for output − Actual hours) × Standard rate.
2. Substitute: (17,000 − 18,000) × 6 = −1,000 × 6.
3. = −6,000, indicating adverse variance.
4. Hence the variance is ₹6,000 adverse.
_Source: ICAI BoS Inter Paper 3, Ch 13 "Standard Costing", §13.5.4 Illus 9c_
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