XYZ Ltd. manufactures a single product 'Z'. The company by using traditional costing method absorbs all production overheads based on machine hours.…

XYZ Ltd. manufactures a single product 'Z'. The company by using traditional costing method absorbs all production overheads based on machine hours. The machine hour rate of overheads is 50 per hour. Actual production overhead incurred were - 12,00,000 (including - 1,30,000 on account of written off obsolete stores and - 75,000 wages being paid for the strike period). Actual machine hours worked during the year were 18,500 hours. Calculate the amount of under-absorption of production overheads during the year.