Question

A single product company has furnished the following standard cost data per unit of output:
Direct materials 20 kg @ Rs.10 per kg
Direct labour 12 hours at Rs. 5.50 per hour
Variable overheads 12 hours at Rs. 10 per hour
Fixed overheads Rs.9,00,000 per month based on a normal volume of 60,000 direct labour hours
Selling price Rs.600 per unit.
The cost incurred and other relevant information for the month of November 2004 are as under:
Direct Materials used 1,00,000 kg at a cost of Rs.10,50,000
Direct Wages paid Rs.3,10,000 for 62,000 hours worked
Overheads Rs.15,26,000 out of which a sum of Rs.9,40,000 is fixed.
Actual output 4,800 units sold for Rs.28,32,000
Assume no stocks of work-in-progress or finished goods at the beginning or the end of the month.
Required:
(i) Compute all variance

Answer 1

Answer:

A single product company has furnished the following standard cost data per unit of output:

Direct materials 20 kg @ Rs.10 per kg

Direct labour 12 hours at Rs. 5.50 per hour

Variable overheads 12 hours at Rs. 10 per hour

Fixed overheads Rs.9,00,000 per month based on a normal volume of 60,000 direct labour hours

Selling price Rs.600 per unit.

The cost incurred and other relevant information for the month of November 2004 are as under:

Direct Materials used 1,00,000 kg at a cost of Rs.10,50,000

Direct Wages paid Rs.3,10,000 for 62,000 hours worked

Overheads Rs.15,26,000 out of which a sum of Rs.9,40,000 is fixed.

Actual output 4,800 units sold for Rs.28,32,000

Assume no stocks of work-in-progress or finished goods at the beginning or the end of the month.

Required:

(i) Compute all variance