ABC Enterprises produces product M and adopts the policy to recover factory

overheads by applying a blanket rate based on machine hours. The cost records reveal

the following information for the year 2020-21-

Budgeted production overheads = Rs. 10,35,000; Budgeted machine hours = 90,000;

Actual machine hours worked = 86700; Actual production overhead = Rs. 9,80,000.

Compute over or under absorption of overhead.