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Taking into account of normal working of the factory, overheads are recovered on production @ ₹ 3.50…

Absorbed overhead exceeds actual overhead, so the excess is over-absorption. Applying the absorption rate and subtracting actual expenses gives ₹11,200. The calculations are…

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Taking into account of normal working of the factory, overheads are recovered on production @ ₹ 3.50 per hour. The actual hours worked during the month of March 2025 were 17600. Total factory expenses incurred during this month recorded at ₹ 50,400. The situation is called _____.

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Correct answer D

Absorbed overhead exceeds actual overhead, so the excess is over-absorption. Applying the absorption rate and subtracting actual expenses gives ₹11,200. The calculations are 17,600×₹3.50=₹61,60017{,}600 \times ₹ 3.50 = ₹ 61{,}600 and ₹61,600−₹50,400=₹11,200₹ 61{,}600 - ₹ 50{,}400 = ₹ 11{,}200.

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