Engineering instrument company estimated its fixed factory overhead for the year as Rs. 450,000 plus a variable rate of Rs.25 per direct labor hour. Factory overhead absorption rate is calculated by the cost accountant as Rs.55 per direct labor hour. During the year, the factory worked for 18000 hours and actual factory overhead incurred were Rs. 936,000.

Required: calculate the followings:

1. Budgeted volume at which factory overhead absorption rate was computed.

2. Analysis of under or overhead factory overhead into volume and budget variances.