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sir,I am blocked to ans my previous qu.that’s why I am telling it here.
My previous qu was a qu from opentuition revision mock,I passed the mock, then reviewed,while reviewing the wrong ans I found no calculation for that qu..and I didn’t find any logic of solving that in my brain,as i thought labour rate per hour worked is the basis I need to multiply with!! I was totally wrong and lost then.That’s why I asked immediately here.
By the way,I finished watching all ur lectures in january,its been a long time.. so,i think I need to re watch some of them now.
Thank u sir.Sorry – I don’t know why the workings for the answer are not appearing, and I will correct it.
The fixed overhead absorption rate is 45920/26240 = $1.75 per hour.
The budgeted hours are 26,240 and the actual hours are 25,200. So there were 1,040 fewer hours than expected.
Therefore the capacity variance is 1,040 x $1.75 = $1,820 adverse
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