Standard costing

In question 7 of the pratical problem, budgeted recovery rate = 60000/30000units = rs.2 per unit . Then we will get the standard cost = 2 Ã? 32500 units = r.s 65000 Then why in the institute's book it is written 32500 hours? Shouldn't it be units ? So if units is taken to find out variable overhead variance, then how do efficiency variance take place(well , institute has also find out the efficiency variance)? How is this possible ? Please reply

Swathi Krishna

Swathi Krishna

CA Inter


24-Sep-20 19:35


Answers (1)

We always compute standard hours for actual output and do the calculations.

Suraj Lakhotia

Suraj Lakhotia


25-Sep-20 17:00