Economics · Cost Accounting
The management of a heavy engineering firm is analyzing the Variable Overhead Variances. The standard variable overhead rate is ₹10 per labor hour. The standard time for one unit is 5 hours. Actual production was 1,000 units. Actual variable overheads incurred were ₹52,000. Actual labor hours worked were 4,900 hours. Calculate the Variable Overhead Expenditure Variance and the Variable Overhead Efficiency Variance.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1₹5,000 Adverse; ₹2,000 Favorable
- 2₹3,000 Favorable; ₹1,000 Adverse
- 3₹2,000 Adverse; ₹1,000 Favorable
- 4₹3,000 Adverse; ₹1,000 Favorable✓
Correct answer
₹3,000 Adverse; ₹1,000 Favorable
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