Costing Standard Costing

STANDARD COSTING

Q.1 : The Standard material cost for a normal mix of one tonne of Chemical X is based on:
Chemical: A B C
Usage (Kg.): 240 400 640
Price per Kg. (Rs.): 6 12 10
During a month, 6.25 tonnes of X were produced from:
Chemical: A B C
Consumption (Tonnes): 1.6 2.4 4.5
Cost (Rs.): 11,200 30,000 47,250
Calculate the material variances.

Q.2 : In order to produce 20 units of finished goods, raw materials of 50 kgs. are required
at Rs. 2.10 per unit. During an accounting period 20 units are manufactured by employing
57 kgs of Raw Materials at the rate of Rs. 1.80.
Calculate Material Variances.

Q.3 : From the following data for May 2008 of a factory calculate:
a. Material cost Variance,
b. Material Price Variance,
c. Material Usage Variance,
d. Material Mix Variance, and
e. Material Yield Variance.
Material Standard Actual
Kgs. Rate Kgs Rate
X 8,000 1.05 7,500 1.2
Y 3,000 2.15 3,300 2.3
Z 2,000 3.3 2,400 3.5

Q.4 : Following data is given for 10 units of finished goods of “X" 50 Kgs. at Rs. 2 per Kg, “
Y ” 80 Kgs. at Rs. 4 per Kg and ‘Z” 70 Kgs. at Rs. 3 per Kg. During the particular
accounting period 65 units of Finished Goods are manufactured and actual data is:
X 350 Kgs. at Rs. 1.95;
Y 500 Kgs. at Rs. 3.95;
Z 450 Kgs. at Rs. 3.35.
Calculate Material Variances.

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Q.5 : Following information pertains to Ocean Ltd-

Standard: 182 units Actual: 182 units

Materials Units Rate Amount Materials Units Rate Amount
SQ SR SC AQ AR AC
A 121 10 1,210.00 A 140 9.5 1,330
B 81 8.5 688.5 B 60 9 540
202 1,898.50 200 1,870
Less: Loss 20 Less: Loss 18
182 182

Calculate all Material Variances.

Q.6 : 100 skilled workmen, 40 semi-skilled workmen and 60 unskilled workmen were to
work for 30 weeks to get a contract job completed. The standard weekly wages were Rs. 60,
Rs. 36 and Rs. 24 respectively. The job was actually completed in 32 weeks by 80 skilled,
50 semi-skilled and 70 unskilled workmen who were paid Rs. 65, Rs. 40 and Rs. 20
respectively as weekly wages.
Find out the labour cost variance, labour rate variance, labour mix variance and labour
efficiency variance.

Q.7 : Calculate Variable overheads: (i) Cost variance, (ii) Expenditure variance,
(iii) Efficiency variance from the following information:
Budget Actual
Rs. Rs.
Variable overheads (Rs.) 10,000 8,910
Hours 10,000 9,900
Output 5,000 4,500

Q.8 : The following data is given.

Particulars Budgeted Actual
Production in units 400 360
Man-hours to produce above 8,000 7,000
Variable overheads (Rs.) 10,000 9,150

The standard time to produce one unit of the product is 20 hours.

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Calculate:
1. Variable overhead efficiency variance,
2. Variable overhead expenditure variance
3. Variable overhead cost variance.
Q.9 : Calculate overhead variance from toe following data:
Budget Actual
Number of Working days 20 22
Man hours per day 8,000 8,400
Output per man hours in units 1 0.9
Fixed Overhead cost (Rs.) 1,60,000 1,68,000

Q.10 : The following information is available from the record of a factory

Budget Actual
Fixed overheads for June (Rs.) 10,000 12,000
Production in June (units) 2,000 2,100
Standard time per unit (hours) 10
Actual hours worked in June 22,000
Calculate:
(i) Fixed overheads cost variance, ii) Fixed overheads expenditure variance. (iii) Fixed
overheads volume variance.

Q.11 : The fixed productions overhead of producing one unit of an item were Rs. 35. Fixed
production overheads were absorbed on the expected annual output of 13,200 units.
The actual production for one month was 1,000 units.
The actual fixed overhead for that month were Rs. 39,000.
Calculate:
➢ Fixed overhead cost variance.
➢ Fixed overhead volume variance.
➢ Fixed overhead expenditure variance.

Q.12 : The following particulars are available in respect of the working of a company for a
particulars period:
Budgeted Sales Actual Sates
Product Quantity Price Amount Quantity Price Amount
(Units) (Rs.) (Rs.) (Units) (Rs.) (Rs.)
A 1,000 2 2,000 1,800 2.5 4,500
B 3,000 3 9,000 4,200 2.75 11,550
Total 4,000 11,000 6,000 16,050
You are required to calculate:

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1. Total Sales Volume Variance

2. Sales Price Variance
3. Sales Mix Variance and
4. Sales Quantity Variance

Q.13 : PH Ltd furnished the following information relating to budgeted sales & Actual sales
for April.
Product Sales Quantity (units) Selling Price (Rs. per unit)
Budgeted Sales: A 1,200 15
B 800 20
C 2,000 40
Actual Sales: A 880 18
B 880 20
C 2,640 38
Calculate the:
1) Sales Quantity Variance,
2) Sales Mix Variance,
3) Sales Price Variance, and
4) Total Sales Variance.

Q.14 : Compute the missing data indicated by the question marks from the following:
Particulars Product R Product S
Sales Quantity (Std.) ? 400
Actual (Units) 500 ?
Price/Unit - Std. 12 15
Price/Unit – Actual 15 20
Sales Price Variance ? ?
Sales Volume Variance 1200 F ?
Sales Value Variance ? ?

Sales mix variance for both the products together is Rs. 450 (F).

Q.15 : Following data is available of Andream:

Budgeted Sales:
➢ A 500 units @ Rs. 5 per unit
➢ B 700 units @ Rs. 8 per unit
Actual Sales:
➢ A 635 @ Rs. 5.4 per unit

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➢ B 865 @ Rs. 8.2 per unit

Calculate all Sales Variances.

Q.16 : Vivek Ltd. Has furnished you the following information for the month of August
2006.
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 66,000
Working Days 25 26
Calculate the variance.

Q.17 : Following data is available from the records of a manufacturing company:

Standard (per unit)
Materials: 6 Kg @Rs. 4 per kg.
Labour: 4 hours 6 Rs. 4 per hour.
Standard production For the month: 12,000 units
Actual production for the month: 12,500 units
Actual material price per kg. Rs. 4.50
Material consumed during the month: 7,800 kg
Direct labour hours worked: 48,000 hours
Actual wage rate per hour Rs. 3.50
Calculate:
1. Material Cost Variance, pi) Material Price Variance.
2. Material Usage Variance.
3. Labour Cost Variance.
4. Labour Rate Variance.
5. Labour Efficiency Variance.
Q.18 : ABC Ltd. has furnished the following information:
Particulars Budget Actual
Output (units) 15,000 16,000
No. of working days 25 28
Fixed Overheads (Rs.) 30,000 30,500
Variable overheads (Rs.) 45,000 47,000

Calculate:
1. Fixed overheads cost variance.

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2. Fixed overhead expenditure variance.

3. Fixed overhead volume variance.
4. Variable overhead cost variance.
5. Variable overhead expenditure variance.

Q.19 : The following details relating to a product are made available to you:
Standard cost per unit:
Materials: 50 Kg @ Rs. 40 per kg.
Labour 400 hours @ Re. 1 per hour.
Actual Cost: (For an output of 10 units)
Material 590 kg @ Rs. 42 per kg.
Labour 3,960 hours @ Rs. 1.10 per units

Calculate following variance.

1. Material Cost Variance.
2. Material Usage Variance.
3. Material Price Variance.
4. Labour Cost Variance.
5. Labour Efficiency Variance.
6. Labour Rate Variance.

Q.20 : The Following standards have been set to manufacture a product.

Particulars Rs. Rs
Direct Materials:
4 units of X 6 Rs. 4 per unit 16
6 units of Y ® Rs. 3 per unit 18
Standard Material Cost 34
Direct Labour
3 Hours @ Rs. 2 per unit 6
Standard Cost per unit 40

The company manufactured and sold 6,000 units of the product during the year, details of
direct material and labour cost being:

Particulars Rs. Rs
Direct Materials:
25,000 units of X @ Rs. 4.20 per unit 1,05,000
36,000 units of Y @ Rs.2.70 per unit 97,200 2,02,200

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Direct Labour
17,000 Hours @ Rs. 2.20 per hrs 37,400
Total Rs. 2,39,600
Calculate following Variances:
1. Material Cost Variance.
2. Material Usage Variance,
3. Material Price Variance.
4. Labour Cost Variance.
5. Labour Efficiency Variance.
6. Labour Rate Variance.

Q.21 : The standard cost sheet tor producing a job consisting of 100 articles for the NMC
Ltd. appended:
Materials:
➢ 60 kgs. of A at Rs. 10 per kg.
➢ 50 kgs. of B at Rs 12 per kg.
Direct wages:
➢ 20 hours operation 1 at Rs. 9 per hour.
➢ 30 hours operation 2 at Rs. 12 per hour.
➢ 40 hours operation 3 at Rs. 16 per hour.
Actual cost of the job were:
Materials:
➢ 70 kgs. of A at Rs. 10.50 per kg.
➢ 48 kgs. of 6 at Rs 13 per kg.
Direct wages:
➢ 25 hours operation 1 at Rs. 8 per hour.
➢ 28 hours operation 2 at Rs. 12 per hour.
➢ 40 hours operation 3 at Rs. 15.50 per hour.
Prepare a table to show:
1. The standard and actual cost of the job;
2. The variances analysed as between quantity and price.

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Q.22 : The Standard Cost card of a product shows the following

Material Cost 2Kgs @ Rs.2.50 per kg Rs. 5.00 per unit
Wages: 2Hrs @ 0.50 paise per kg Re. 1.00 per unit
The actuate which have emerged from business operations are as follows:
Production 8,000 units
Material Cost 16,500Kgs @ Rs.2.400 per kg Rs. 39,600
Wages: 18,000Hrs @ 0.40 paise per kg Rs. 7,200
Calculate appropriate material and labour variances

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