Q. 4 a) Information about MLM Ltd.

For the month of January

Budget Actual
Output (units) 30000 32500
std. Hours 30000 33000
Fixed OH 45000 50000
Variable OH 60000 68000
Working Days 25 26

Solution: Fixed Overhead Cost Variance

Budgeted Fixed OH 45000

Budgeted Prod 30000
std rate (cost/unit) 1.5
Actual Prod 32500
Absorbed Cost 48750
Actual Fixed overhead 50000
Fixed Overhead Cost Variance -1250 adverse

Fixed Overhead Volume Variance

Absorbed cost 48750

Budgeted Fixed OH 45000
Fixed Overhead Volume Variance ₹ 3,750.00 favourable

Fixed Overhead Capacity Variance

Std OH (Actual hours x Std Rate) 49500
Revised budgeted hours 31200
revised budgeted OH 46800
Fixed Overhead Capacity Variance 2700 favourable

Fixed Overhead Efficiency Variance

Absorbed cost 48750
Std OH 49500
Fixed Overhead Efficiency Variance -750 adverse

Fixed Calendar Variance

Std rate/ day 1800
Fixed Calendar Variance 1800 favourable