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SR Ltd's fixed production overhead is ₹3,15,000 and its normal capacity is 45,000 units. What is the fixed overhead absorbed per unit under AS 2?
A₹6
B₹8
C₹9
D₹7
Answer & Solution
Correct answer: D. ₹7
1. Fixed overhead per unit = total fixed overhead ÷ normal capacity.
2. = ₹3,15,000 ÷ 45,000 units.
3. = ₹7 per unit.
_Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 — Q.1(b), AS 2 Valuation of Inventories._
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