Chapter 6 STANDARD COSTING

Q1. From the following, calculate Material Variances
Quantity of material purchased               2,500 units
Value of material purchased                             Rs 7,500
Standard quantity of material required for one ton of finished product          25 units
Standard rate of material                                 Rs 2 per unit
Finished production                                                    80 tons

Q2. A manufacturing concern, which has adopted standard costing, furnishes the following data:
Standard:                Material for 70 kg finished products: 100kg
                                                  Price of Materials: Re 1 per kg
Actual:                              Output: 2,10,000 kg
                                                  Materials used: 2,80,000 kg
                                                  Cost of material: Rs 2,52,000
Calculate:                Material Usage Variance, Material Price Variance, Material Cost Variance.

Q3. From the following particulars compute all material variances:
Quantity of materials:                                                 3,000 units
Value of materials purchased                  Rs 9,000
Standard quantity of material required per tonne of output:               30 units
Standard rate of materials:                               Rs 2.50 per unit
Opening stock of material:                      Nil
Closing stock of material:                                 500 units
Output during the period:                                  80 tonnes

Q4. A furniture manufacturer sunmica tops for tables. From the following information, find out the Price Variance, Usage Variance and Cost Variance;
Standard quantity of sunmica per table:                      4sq. ft.
Standard price per sq ft of sumica:                                                 Rs 5
Actual production of tables:                                                                      1,000
Sunmica actually used:                                                                             4,300 sq. ft.
Actual purchase price of sunmica per sq. ft.:      Rs 5.50

Q5. From the following compute Material Variances
Material
Standard
Actual

Kilo
Price
Kilo
Price
A
10
2
5
3
B
20
3
10
6
C
20
6
15
5

Q6. ABC produces an article by mixing 2 inputs. Following standards have been set up for input
Material
Standard Mix
Standard Price per kg
X
40%
Rs 4
Y
60%
Rs 3
The standard loss in processing is 15%. During September, 2009, the company produced 1,700 kg of finished output. The actual position of inputs was as under:
Material
Purchases (kg)
Rate
X
   830
Rs 4.25 per kg
Y
1,190
Rs 2.50 per kg
Calculate all possible Material Variances.

Q7. The standard cost of a certain drug is:
40% of Material A at Rs 20 per lb
60% of Material B at Rs 30 per lb
Standard loss expected in production is 10%. In a certain period 90 lbs of Material A at Rs 18 per lb and 110 lb of Material B at Rs 34 per lb were used. Good production realised was 182 lbs. Calculate the different material variances.

Q8. A Chemical Industry provides you the following information from their records. For making 10 kgs of VANISH, standard material requirement are:
Material
Quantity (kg)
Rate per kg (Rs)
A
8
6
B
4
4
During April, 2009, 1,000 kg of VANISH were produced. Actual consumption of materials is as under:
Material
Quantity (kg)
Rate per kg (Rs)
A
750
7
B
500
5
Calculate all material variances.

Q9. The standard material cost for 100 kg of Chemical X is made up of:
Chemical A    30 kg @ Rs 4 per kg
Chemical B    40 kg @ Rs 5 per kg
Chemical C   80 kg @ Rs 6 per kg
In a batch, 500 kg of chemical X were produced from the mix of:
Chemical A    140 kg at a cost of Rs 588
Chemical B    220 kg at a cost of Rs 1,056
Chemical C   440 kg at a cost of Rs 2,860
How do the yield, mix and the price factor contribute to the variance in the actual per 100 kg of Chemical X over standard cost? Calculate Material Usage Variance, Material Price Variance, Material Cost Variance.

Q10. The Ideal Alloy Co Ltd manufactures a single product, the Standard Mix of which is:
Material A     60% @ 20 per kg
Material B     40% @ 10 per kg
Normal Loss in production is 20% of input. Due to shortage of Material A, the standard mix was changed.
Actual results for December, 2009 were:
Material A
210 kgs
at Rs 20
4,200
Material B    
190 kgs
at Rs 9
1,710
Input
400 kgs

5,910
Loss
80 kgs

-
Output
320 kgs

5,910
Calculate Material Price and Usage Variances

Q11. Using the following information for Department A, calculate all possible labour variances:
Actual wage rate per hour
Rs 3.40
Standard hours for production
8,640 hours
Standard rate per hour
Rs 3
Actual hours worked
8,200 hours

Q12. Calculate all labour variances from the following data:

Standard
Actual

Hours
Hourly Rate
Hours
Hourly Rate
Skilled labour
2,880
20
1,760
25
Semi-skilled labour
1,920
10
2,640
5
Total
4,800

4,400

Output
108 kg

90 kg


Q13. Calculate labour variances from the following:
Standard rate
Rs 4 per hour
Standard time
10 hours per unit
Actual production
11,000 units
Hours taken: Production
                     Ideal
                     Total
11,500
500
12,000
Payment of Rs 60,000 was made @ Rs 5 per hour

Q14. The details regarding the composition and the weekly wage rates of labour force engaged on a job scheduled to be completed in 30 weeks are as follows:
Category of
Standard
Actual
Worker
No. of Labourers
Weekly wage
rate per labourer
No. of Labourers
Weekly wage
rate per Labourer
Skilled
75
60
70
70
Semi-skilled
45
40
30
50
Un-skilled
60
30
80
20
The work is actually completed in 32 weeks. Calculate the various labour variances.

Q15. The budgeted labour force producing 1,000 articles of ‘B’ is:

Total Standard Hours
Total Standard Cost
300 men @ 40 P per hour for 50 hrs
1,500
600
20 women @ 30 P per hour for 30 hrs
600
180
10 boys @ 20 P per hour for 20 hrs
200
40

2,300
820
The actual data and related work force are as follows. Articles produced 1,000.

Total Actual Hours
Total Actual Cost
25 men @ 45 P per hour for 50 hrs
1,250
562.50
30 women @ 30 P per hour for 30 hrs
900
270
10 boys @ 20 P per hour for 15 hrs
150
30
Calculate Labour Cost Variance, Labour Rate Variance, Labour Efficiency Variance.

Q16. A factory working for 50 hours a week, employees 100 workers on a job work. The standard rate is Re 1 per hour and standard output is 200 units per gang hour. During a week in June, 10 employees were paid at 80 paise per hour and 5 at Rs 120 per hour, rest of the employees were paid at standard hour rate. Actual number of units produced were 10,200. Calculate Labour Cost Variances.

Q17. XYZ Ltd. operates on a standard costing system. The budgeted overheads for the current year were fixed at Rs 4,20,000 with a predetermined overheads recovery rate of Rs 7 per direct labour hour. The actual direct labour hours for the year amounted to 62,000 against which only 61,500 hours should have been spent for the production completed during the year. The actual overhead rate worked out at Rs 6.75 per direct labour hour. Compute all possible overheads variances.