Pick up the correct statement from the following: A. Over head rate = $$\frac{{{\text{total over head in rupees for period}}}}{{{\text{direct labour in rupees for period}}}}$$ B. Over head cost per unit = Overhead ratio × direct labour cost/unit C. Both (A) and (B) D. Neither (A) nor (B)

The correct answer is: C. Both (A) and (B).

Overhead rate is the amount of overhead cost that is assigned to each unit of product. It is calculated by dividing the total overhead cost for a period by the total direct labor cost for the same period.

Overhead cost per unit is the amount of overhead cost that is assigned to each unit of product. It is calculated by multiplying the overhead rate by the direct labor cost per unit.

Both overhead rate and overhead cost per unit are used to allocate overhead costs to products. Overhead rate is used to allocate overhead costs to products when direct labor costs are not available. Overhead cost per unit is used to allocate overhead costs to products when direct labor costs are available.

Here is a more detailed explanation of each option:

• Option A: Overhead rate = $\frac{{{\text{total over head in rupees for period}}}}{{{\text{direct labour in rupees for period}}}}$

This option is correct. The overhead rate is calculated by dividing the total overhead cost for a period by the total direct labor cost for the same period.

• Option B: Over head cost per unit = Overhead ratio × direct labour cost/unit

This option is also correct. The overhead cost per unit is calculated by multiplying the overhead rate by the direct labor cost per unit.

• Option C: Both (A) and (B)

This option is the correct answer. Both overhead rate and overhead cost per unit are used to allocate overhead costs to products.

• Option D: Neither (A) nor (B)

This option is incorrect. Both overhead rate and overhead cost per unit are used to allocate overhead costs to products.