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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?

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? Correct Answer Rs 1.20

Means budget expense = Rs. 300000 - Rs. 18000
= Rs. 282000Budgeted variable overhead = Rs. 282000 - (fixed cost) Rs. 87000
= Rs.195000Variable cost pr unit is = 195000 / 162500
= Rs. 1.20

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