Practice

Manual
Cost & Management Accounting

Standard Costing
Practice Questions

Question 1
Standard cost card to produce 1 unit of a product is as follow;
Material X: 2kg @ Rs 2.5/kg
Material Y: 3kg @ Rs 3/kg
Actual Data:
Output: 1200 units
Material X: 2800kgs for Rs 9350
Material Y: 4200 kgs for Rs 12200
Required: Compute material price & usage variance

Question 2
Budget for the financial year 2021 w.r.t to cost is as under;
Particulars Per Unit Cost Total Cost
Direct Material (40kgs@ Rs 70/kg) 2800 17,360,000
Direct Labour (8 hours @ Rs 250/hours) 2000 12,400,000
Variable Overheads (60% of labour) 1200 7,440,000
Budgeted cost for budgeted output 37,200,000

Actual Results
Actual Output 5,500 units of finished goods
Particulars Kgs/Hrs Cost
Direct Material 231,000 17,325,000
Direct Labour 39,875 10,686,500
Variable Overheads 39,875 5,582,500
33,594,000

Required : Calculate all possible variances

FROM THE DESK OF AHMED RAZA MIR (FCA) 1

Practice
Manual
Cost & Management Accounting

Question 3
Following is the budget for the first quarter of 2015:
Annual Production 70,000 Units of Finished Goods
First quarter production 40%
Direct Material 14,000,000 (Rs 50/kg)
Direct Labour 12,600,000 (Rs 30/hour)
Actual Results
Actual Output 30,000 Units of Finished goods

Particulars Kgs/Hrs Rate

Direct Material 309,000 For jan 55
For Feb & March 58

Direct Labour 441,000 For jan 28

For Feb & March 31

Required: Calculate all possible Variances

Question 4

Following is the standard for the production of 1 unit of FG:

Raw Material 40 Kg @ Rs 125 /Kg

Labour 20 Hours @ Rs 35 /hr

VOH 20 Hours @ Rs 16 /hr

Actual output 90,000

FROM THE DESK OF AHMED RAZA MIR (FCA) 2

Practice
Manual
Cost & Management Accounting
Actual Cost

Kg or Hr Rate Cost

Raw Material 3,870,000 120.00 464,400,000

Labour 1,728,000 36.00 62,208,000

VOH 1,728,000 14.50 25,056,000

Required
Calculate all possible variances

Question 5 (Material Loss)

ABC Ltd, produces a single product. Following inputs are used in the following production;
Raw material Quantity Rate Amount
A 5 10 50
B 3 8 24
C 2 6 12
10 86

Expected loss 14%

Actual Output = 103200 kgs

Actual input
Raw material Quantity Rate Amount
A 65000 11 715000
B 35000 7 245000
C 25000 6.5 162500
125000 1122500

Required : Calculate total material, material price and usage variance.

FROM THE DESK OF AHMED RAZA MIR (FCA) 3

Practice
Manual
Cost & Management Accounting
Question 6 (Mix & Yield)
Standard mix to produce 9 kgs:
Raw material Quantity Rate Amount
A 5 6 30
B 5 4.8 24

10 54

Actual output = 63,000 kgs

Actual Input:

Raw material Quantity Rate Amount

A 40,000 6.5 260,000
B 35000 5 175,000

75000 435,000

Required: Calculate all possible material Variances.

Question 7
4 Raw materials are added to produce product ZZZ for an output at 29.25 kgs following input is required:

Raw materials Quantity Rate

A 8 kgs 125
B 5.6 kgs 200
C 14 kgs 104
D 7.4 kgs 160

Actual output = 260,000 kgs

FROM THE DESK OF AHMED RAZA MIR (FCA) 4

Practice
Manual
Cost & Management Accounting
Actual input
Raw materials Quantity Rate
A 88,000 kgs 130
B 52,000 kgs 210
C 135,000 kgs 96
D 85,000 kgs 140

Required : Calculate all possible variances

Question 8 (O bhai data flex hoga)

Budgeted data
output = 80,000 units
Raw material = 48000 kgs costing Rs 6 million
Actual
Output = 90,000 units
Raw material = 58500 kgs costing Rs 71,37,000
Required: Calculate material price and usage variance

FROM THE DESK OF AHMED RAZA MIR (FCA) 5