The actual output of 162,500 units and actual fixed costs of Rs 87000 were exactly as budgeted. However, the actual expenditure of Rs 300,000 was Rs 18,000 over budget. What was the budget variable cost per unit?

A) Rs 1.20 B) Rs 1.31 C) Rs1.42 D) Rs 1.50

Answer & Solution

Correct Answer: Option A

Means budget expense = Rs. 300000 - Rs. 18000
= Rs. 282000 Budgeted variable overhead = Rs. 282000 - (fixed cost) Rs. 87000
= Rs.195000 Variable cost pr unit is = 195000 / 162500
= Rs. 1.20

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Anita Saini 7 years ago

Actual exp is 300000 which is 18000 over budget
Means budget exp is 300000-18000=282000
Budget exp include both the cost (fixed and variable)
Budgeted variable overhead 282000-fc87000 =195000
Variable cost pr unit is 195000/162500=1.20Ans.

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The actual output of 162 500 units and actual fixed costs...

The actual output of 162,500 units and actual fixed costs of Rs 87000 were exactly as budgeted. However, the actual expenditure of Rs 300,000 was Rs 18,000 over budget. What was the budget variable cost per unit?

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