STANDARD COSTING

Material Cost Variances

Question 1

UV Ltd presents the following information for November. Calculate the Cost Variances.

 Budgeted production of product P = 200 units

 Standard consumption of raw materials = 2 kg per unit of P
 Standard price of Material A = `6 per kg.
 Actually 250 units of P were produced. Material A was purchased at `8 per Kg and consumed at
1.8 kg per unit of P.

Question 2

A manufacturing concern which has been adopted Standard Costing furnishes the following
information.

Standard Quantity of Material Actual Output 2,10,000 kg

for 70kg of Finished products 100 kg Materials used 2,80,000 kg
Standard price of Material ` 1 per kg Actual Cost of Materials ` 2,52,000
Calculate – (a) Material Usage Variance, (b) Material Price Variance and (c) Material Cost Variance.

Labour Cost Variances

Question 3 -

Given the following data, compute the relevant variances-

Particulars Skilled Semi – Skilled Un - Skilled

Number in Standard gang (for 40 hour week) 16 6 3
Standard rate per hour (`) 3 2 1
Actual Number in the gang (for 42 hour week) 14 9 2
Actual rate of pay (`) 4 3 2
In the week, the gang as a whole produced 900 Standard hours. However during the week, 4 hours
per worker was considered idle time to machine breakdown.

VOH Cost Variances

Question 4 –

Particulars Production (in units) Man hours to produce the output VOH (in `)
Budgeted 400 8,000 10,000
Actual 360 7,000 9,150
The following data is given. Calculate VOH Variances.

Elixir, for CA&CMA – Pazhayanadakkavu, Thrissur – 1,

Question 5 –

From the following information pertaining to January, calculate the Overhead Variances-

Particulars Production (in units) Variable Overhead (`) Hours worked

Budgeted 300 7,800 Standard time for 1 unit is 20
hours.
Actual 250 7,000 4,500
Also discuss the effect on Variances, if Actual Hours 4,500 includes 300 hours of abnormal idle time.

FOH Cost Variances

Question 6:

From the following information pertaining to February, calculate the Overhead Variances.

Particulars Budgeted Actual

Number of working days 25 27
Production in units 20,000 22,000
Fixed Overhead in ` 30,000 31,000
Budgeted Fixed Overhead Rate is ` 1 per hour. Actual hours worked in February is 31,500.

Question 7:

From the following information pertaining to February, calculate the Overhead Variances.

Particulars Budgeted Actual

Number of working days 25 27
Production in units 40,000 44,000
Fixed Overhead in ` 60,000 62,000
Budgeted Fixed Overhead Rate is `1 per hour. Actual hours worked in February is 63,000.

Elixir, for CA&CMA – Pazhayanadakkavu, Thrissur – 1,