Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) Accounting and Auditing Cost and Management Accounting Standard costing
Comprehension Passage
Read the following passage carefully and answer the question.
XYZ Ltd. funrnished you with the following information:
| Budget | Actual (in a particular month) | |
| No. of working days | 25 | 27 |
| Production (in units) | 20,000 | 22,000 |
| Fixed overhead (in Rupees) | 30,000 | 31,000 |
Budgeted overhead rate is Rs. 1 per unit. In a particular month the actual hours worked were 31,500.
Find the capacity variance for the month from the information given in the passage.
1
Rs. 1,000 (Favourable)
2
Rs. 900 (Adverse)
3
Rs. 1,500 (Favourable)
4
Rs. 1,000 (Adverse)