For a department, the standard overhead rate is Rs.2.50 per hour and the overhead allowances are as follows: 

Activity Level (Hours)                 Budgeted Overhead Allowance 

         3,000                                                  Rs.10,000 

         7,000                                                  Rs.18,000 

       11,000                                                   Rs.26,000 

In a period, the activity level of the said department was 10,000 hours and the actual overheads incurred were Rs.22,000. 

Required:

i) The fixed cost

ii) The standard activity level on which the standard overhead rate has been fixed. 

iii) Budget variance 

iv) Idle capacity variance 

v) Overall variance with check (proof)

Answer rating: 100% (QA)

ANSWERS i For 3000 hours level Rs 10000 For 7000 hours level Rs 18... View the full answer