Exercises
Standard costing and variance Analysis
Question 01
Following details have been extracted from the standard cost card of ABC (Pvt) Ltd.
Direct Material cost - 50Kg @ 2.50 per kg
Actual Results Total production Units - 150 Direct Material - 6000 Kg have been purchased at Rs.15,600.
You are required to calculate material variances.
Question 02
Standards per unit of product
Direct Material
24Kg.@ Rs.25per Kg
Direct Labour
12 hours @Rs.6 per hour
Actual details for given financial period
Output Produced (Units)
: 4,200
Direct Materials:
Purchased
: 125,000Kg for Rs.3, 250,000
Issued to production
: 125,000Kg
Direct Labour
: 52,800 hours worked for Rs.330, 000
Calculate,
1. Direct Material variances 2. Direct Labour variances
Ganga Madhushani
Page 1
Question 03
Brown & Company manufactures a chemical Dynamite (D) using two components of A and B. Component A has a standard cost of Rs. 20 and component B has a standard cost of Rs.25 per kg. D has a standard selling price of Rs.30. (i) How can you establish the best combination out of these two? Mix 1 - 10 Kg s of A and 10 kg s of B yield 18 kgs of D Mix 2 - 8 Kgs of A and 12 Kg s of B will yield 19 Kgs of D (ii) If mix two is decided to be continued, what is the standard cost per unit of D (ii) Assume that under mix 2, production has been started. However actually 1850 kgs of D have been produced, using 900 Kgs of A and 1100 kgs of B. how do you calculate the material mix variance? (iv) What is the material yield variance?
Question 04
Q Plc has manufactured 1500 units of product P and the cost of labour was Rs. 17,500 for 3,080 hours. During the period 100 (included within 3080) hours were recorded as idle time. The standard direct labour hours per unit was 2 at a standard cost of Rs. 5 per hour
Calculate,
1. Direct Labour cost variance 2 Direct labour rate variance 3. Direct labour idle time variance
4. Direct labour efficiency variance
Ganga Madhushani
Page 2