B.Com.
(Hons) Semester III – Management Accounting
Practical Problems - Home Assignment
1. For making 10 kg. of CEMCO, the standard material requirements is:
Material Quantity Rate per kg. (Rs. )
A 8 kg 6.00
B 4 kg 4.00
During April, 1,000 kg of CEMCO were produced. The actual consumption of
materials is as under:
Material Quantity (Kg.) Rate per kg. (Rs. )
A 750 7.00
B 500 5.00
CALCULATE (A) Material Cost Variance; (b) Material Price Variance; (c)
Material usage Variance.
2. The standard mix to produce one unit of a product is as follows:
Material X 60 units @Rs. 15 per unit = Rs.900
Material Y 80 units @ Rs. 20 per unit = Rs.1,600
Material Z 100 units @ Rs. 25 per unit = Rs.2,500
240 units Rs.15,000
During the month of April, 10 units were actually produced and
consumption was as follows:
Material X 640 units @ Rs. 17.50 per unit = 11,200
Material Y 950 units @ Rs. 18.00 per unit = 17,100
Material Z 870 units @ Rs. 27.50 per unit = 23,925
2,460 units Rs.52,225
CALCULATE all material variances.
3. GAP Limited operates a system of standard costing in respect of one of its
products which is manufactured within a single cost centre. Following are
the details.
Budgeted data:
Material Qty Price Amount
(Rs.) (Rs.)
A 60 20 1200
B 40 30 1200
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
Inputs 100 2400
Normal loss 20
Output 80 2400
Actual data:
Actual output 80 units.
Material Qty Price Amount
(Rs.) (Rs.)
A 70 ? ?
B ? 30 ?
Material Price Variance (A) Rs. 105A
Material cost variance Rs. 275A
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
You are required to CALCULATE:
(i) Actual Price of material A
(ii) Actual Quantity of material B
(iii) Material Price Variance
(iv) Material Usage Variance
(v) Material Mix Variance
(vi) Material Sub Usage Variance
4. The following standards have been set to manufacture a product:
Direct Material:
(Rs.)
2 units of A @ Rs.4 per unit 8.00
3 units of B @ Rs. 3 per unit 9.00
15 units of C @ Rs.1 per unit 15.00
32.00
Direct Labour: 3 hours @ Rs. 8 per hour 24.00
Total standard prime cost 56.00
The company manufactured and sold 6,000 units of the product during the
year. Direct material costs were as follows:
12,500 units of A at Rs.4.40 per
unit 18,000 units of B at Rs. 2.80
per unit 88,500 units of C at
Rs.1.20 per unit
The company worked 17,500 direct labour hours during the year. For 2,500 of
these hours, the company paid at Rs.12 per hour while for the remaining, the
wages were paid at standard rate.
CALCULATE
(i) Materials price variance & Usage variance
(ii) Labour rate &Efficiency variances.
5. XYZ Company has established the following standards for factory
overheads.
Variable overhead per unit: Rs.10/-
Fixed overheads per month Rs.1,00,000
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
Capacity of the plant 20,000 units per month.
The actual data for the month are as follows:
Actual overheads incurred Rs. 3,00,000
Actual output (units) 15,000 units
Required:
CALCULATE overhead variances viz:
(i) Production volume variance
(ii) Overhead expense variance
6. A company has a normal capacity of 120 machines, working 8 hours per
day for 25 days in a month. The fixed overheads are budgeted at
Rs.1,44,000 per month. The standard time required to manufacture one unit
of product is 4 hours.
In April, 2020, the company worked 24 days of 840 machine hours per day
and produced 5,305 units of output. The actual fixed overheads were
Rs.1,42,000.
CALCULATE:
(i) Expense variance
(ii) Volume variance
(iii) Total fixed overheads variance.
7. Following information is available from the records of a factory:
Budget Actual
Fixed overhead for June, 2020 Rs. 10,000 Rs. 12,000
Production in June, 2020 (units) 2,000 2,100
Standard time per unit (hours) 10 –
Actual hours worked in June – 21,000
CALCULATE:
(i) Fixed overhead cost variance,
(ii) Expenditure variance,
(iii) Volume variance.
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
8. XYZ Ltd. has furnished you the following information for the month of
August, 2020:
Budget Actual
Output (units) 30,000 32,500
Hours 30,000 33,000
Fixed overhead Rs. 45,000 50,000
Variable overhead Rs.60,000 68,000
Working days 25 26
CALCULATE overhead variances.
9. S.V. Ltd. has furnished the following data:
Budget Actual, July (20X2)
No. of working days 25 27
Production in units 20,000 22,000
Fixed overheads Rs. 30,000 Rs. 31,000
Budgeted fixed overhead rate is Rs. 1.00 per hour. In July, 2020, the
actualhours worked were 31,500.
CALCULATE the following variances:
(i) Volume variance.
(ii) Expenditure variance.
(iii) Total overhead variance.
10. The following data has been collected from the cost records of a unit for
computing the various fixed overhead variances for a period:
Number of budgeted working days 25
Budgeted man-hours per day 6,000
Output (budgeted) per man-hour (in units) 1
Fixed overhead cost as budgeted Rs. 1,50,000
Actual number of working days 27
Actual man-hours per day 6,300
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
Actual output per man-hour (in-units) 0.9
Actual fixed overhead incurred Rs. 1,56,000
CALCULATE fixed overhead variances:
(i) Expenditure Variance
(ii) Volume Variance,
(iii) Fixed Cost Variance.
11. J.K. Ltd. manufactures NXE by mixing three raw materials. For every batch
of 100 kg. of NXE, 125 kg. of raw materials are used. In April, 2020, 60
batches were prepared to produce an output of 5,600 kg. of NXE. The
standard and actual particulars for April, 2020, are as follows:
Standard Actual Quantity of
Raw Materials
Raw Mix Price per kg. Mix Price per
Purchased
Materials Kg.
(%) (Rs.) (%) (Rs.) (Kg.)
A 50 20 60 21 5,000
B 30 10 20 8 2,000
C 20 5 20 6 1,200
You are required to CALCULATE:
(i) Material Price variance
(ii) Material Usage Variance
12. Following data is extracted from the books of XYZ Ltd. for the month of
January, 2020:
(i) Estimation-
Particulars Quantity (kg.) Price (Rs. ) Amount (Rs. )
Material-A 800 ? --
Material-B 600 30.00 18,000
--
Normal loss was expected to be 10% of total input materials.
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
(ii) Actuals-
1480 kg of output produced.
Particulars Quantity (kg.) Price Amount (Rs.)
(Rs.)
Material-A 900 ? --
Material-B ? 32.50 --
59,825
(iii) Other Information-
Material Cost Variance = Rs. 3,625
(F)Material Price Variance = Rs.175
(F)
You are required to CALCULATE:
(i) Standard Price of Material-A;
(ii) Actual Quantity of Material-B;
(iii) Actual Price of Material-A;
(iv) Revised standard quantity of Material-A and Material-B; and
(v) Material Mix Variance.
13. Paras Synthetics uses Standard costing system in manufacturing of its
product ‘Star 95 Mask’. The details are as follows;
Direct Material 0.50 Meter @ Rs.60 per meter Rs. 30
Direct Labour 1 hour @ v20 per hour Rs. 20
Variable overhead 1 hour @ Rs.10 per hour Rs. 10
Total Rs. 60
During the month of August, 2020 10,000 units of ‘Star 95 Mask’ were
manufactured.
Details are as follows:
Direct material consumed 5700 meters @ Rs.58 per meter
Direct labour Hours ? @ ? Rs. 2,24,400
Variable overhead incurred Rs.1,12,200
Variable overhead efficiency variance is Rs.2,000 A. Variable overheads are
based on Direct Labour Hours.
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
You are required to calculate the missing data and all the relevant Variances.
Prof. Subhasis Pal
SOC, NMIMS, Navi Mumbai
Standard Costing and Variance Analysis
B.Com.(Hons) Semester III – Management Accounting
Standard Costing and Variance Analysis
