Standard Costing

[Problems on--- Material Cost Variances]

Problem Answer
i)MCV----
Q.1.XYZ Ltd furnishes the following information:
Standard: 48,000[F]
Material for 70 Kg Finished Product--------------------100 Kg. ii)MUV---
Price of Material--------------------------------------------Re.1 / Kg
20,000[F]
Actual : iii)MPV---
Material Used ------------------------------------------------2,80,000 Kg
Output----------------------------------------------------------2,10,000 Kg 28,000[F]
Cost of Material----------------------------------------------Rs.2,52,000
Now, Calculate:
i)Material Cost Variance ii)Material Usage Variance ;and iii)Material Price Variance.
Q.7[a]
Q.2. From the following particulars furnished by M/s. Starlight Co. Ltd. June-12
find out (i) Material Cost Variance; (Ii) Material Usage Variance And (Iii) Material Price CMA[2008]
Variance. Ans:
i) = Rs. 3500
Value of Material purchased . . Rs. 9,000
(Adv)
Quantity of Material purchased . . 3,000 units ii) = Rs. 1000
Std quantity of materials required per tonne of finished product . . 25 units (Adv)
Standard rate of material . . Rs. 2 per unit iii) Rs. 2500
(Adv)
Opening Stock . . Nil
Closing Stock of material . . 500 units
Finished production during the period . . 80 tonnes.
Q.3. The following details relating to the Product 'X' during the month of Q.5[a]
Dec-13
March, 2015 are available: Standard Cost per unit CMA[200
Materials 50 kg @ Rs.40 per kg. 8
Labour 400 hours @ Rs. 1.00 (one) per hour. Ans:
Actual Cost for the month i)9,800[A
]
Material 4,900 kgs @ Rs.42 per kg.
ii)4,000[F
Labour 39,600 hours @ Rs.1.10 per hour. ]
Actual Production - 100 units iii)5,800[
You are required to compute: A]
iv)3,960[
(i) Material Price Variance (MPV)
A]
(ii) Material Usage Variance (MUV) v)400[F]
(iii) Material Cost Variance (MCV) vi)3,560[
(iv) Labour Rate Variance (LRV) A]
(v) Labour Efficiency Variance (LEV)
(vi) Labour Cost Variance (LCV)
You are also required to reconcile the Standard and the Actual Cost with the
help of such variances.
Q.4[A]

DEC-13
[ 2012]
Q.1[C]
ANS
27,000
Q.4[B]
DEC-13
[2012]
Q.2[B]
ANS:
i)12,50,00
0[f]
ii)4,00,000
[f]
iii)2,50,000
[f]
iv)6,00,000
[f]
v)8,50,000
[f]

Illustratio
Q.5. The standard quantity and standard price of raw material required for one n 2:
[Study
unit of product A are given as follows Note-2012]
Quantity (kg.) S.P. (`) i)370[A]
Material X 2 3 ii)470[A]
iii)100[F]
Material y 4 2 iv)133[A]
The actual production and relevant data are as follows: v)
Material X 1,100 kgs. @ ` 3,410
Material y 1,800 kgs. @ ` 3,960
Calculate Variances. Actual production was 500 units.
Illustration
Q.6. Mixers Ltd is engaged in producing a standard mis using 60 kg of chemical X and 40 4:
[Study
kg of chemical Y.The standard loss of production is 30%.The standard proce of X is Rs.5 per Note[old]]
kg and of Y is Rs.10 per kg.The actual mixture and yield were as follows:- PAGE-369
X—80 kg @Rs.4.50 per kg i)230[F]
ii)40-F
Y---70 kg @Rs.8 per kg 140-F
Actual Yield 115 kg. iii)]92.5-F
42.9 A
Calculate all material variances. iv)50 A
v)]100-F