Question: 2 (B) A company planned to produce 20,000 units of a product during the period to come. The standard time to produce these units was 40,000 hours. At this level of activity, fixed and variable factory overheads were budgeted at Rs. 50,000 and Rs.70,000 respectively. During the period, 25,000 units were actually produced in 48,000 hours. Actual factory overheads incurred were Rs. 157,000 You are required to calculate variances for factory overheads using two variance methods Question: 3 I) Explain the significance of differential costing for decision making? II) What do you mean by flexible budget? III) What do you mean by margin of safety?

Question: 2 (B) A company planned to produce 20,000 units of a product durling the period to come. The standard time to produce these units was 40,000 hours. At this level of acthity, fixed and variable factory overheads were budgeted at Rs. 50,000 and Rs.70,000 respectively. During the period, 25,000 units were actually produced in 48,000 hours. Actual factory overheads incurred were Rs. 157,000 You are required to calculate variances for factory overheads using two variance methods Questlon:3 I) Explain the significance of differential costing for decislon making? ii) What do you mean by flexlble budget? Iii) What do you mean by margin of safety