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: Option A
Solution(By Examveda Team)
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
Join The Discussion
Comments ( 1 )
Related Questions on Costing
Basic objective of cost accounting is ________
A. tax compliance.
B. financial audit.
C. cost ascertainment.
D. profit analysis.
Process costing is suitable for ________.
A. hospitals
B. oil refing firms
C. transport firms
D. brick laying firms
The cost which is to be incurred even when a business unit is closed is a _____.
A. imputed cost
B. historical cost
C. sunk cost
D. shutdown cost
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.