13. The standard cost of a chemical mixture is:
40% Material A at Rs, 20 per kg.
60% Material b at Rs. 30 per kg.
A standard loss of 10% is expected in production. During a period, there is
used:
90 Kgs Material A at cost of Rs. 18 per Kg.
110 Kgs Material B at a cost of Rs. 34 per kg,
The Weight produced is 182 Kgs of good product.
Calculate:
(a) Material Price Variance.
(b) Material Mix Variance.
(c) Material Yield Variance.
(d) Material Cost Variance,
Answers
Explanation:
actual production = 182
standard loss =10%
it means,
expected outputs (units) inputs (units)
90-» 100
182-»?
material A = (400-360)×90 = ₹3600 (F)
material B = (600-680)×110 = ₹8800 (A)
= 5200
material A = 400×(80-90) = ₹4000
material B = 600×(120-110) = ₹6000
= 2000
= (182-180)×577.78
= 1155.56
= 1155.56
material A = (400×81) - ( 360×90 )
= 32400 - 32400
= nil
material B = (600×121) - ( 680×110 )
= 72600 - 74800
= 2200
Answer:
Real production 182
When the standard loss is 10%, it means that the predicted outputs (units) and inputs (units) are 90-» 100, 182-»?
=202 UNITS
Material A
Standard quantity in Tons=81
Rate=400 Rs.
Total=32,400 Rs.
Material B
Standard quantity in Tons=121
Rate=600 Rs.
Total=72,600 Rs.
Total quantity (A+B)=202
Total rate=1,05,000
Material A
Actual quantity=90
Rate=360 Rs.
Total=32,400
Standard proportion of Actual input tons=80
Material B
Actual quantity=110
Rate=680 Rs.
Total=74,800
Standard proportion of Actual input tons=120
Total (A+B)=200
Total Rs. =1,07,200
Total Standard proportion of Actual input tons=200
a)Material cost variance (MCV)=(SR×SQ)-(AR×AQ)
Material A = (400-360)×90 = ₹3600 (F)
Material B = (600-680)×110 = ₹8800 (A)
Material(A+B)= 5200
b)Material mix variance
Material A = 400×(80-90) = ₹4000
Material B = 600×(120-110) = ₹6000
= 2000
c)Material price variance
Material A = (400×81) - ( 360×90 )
= 32400 - 32400
= nil
Material B = (600×121) - ( 680×110 )
= 72600 - 74800
= 2200
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