PRACTICE QUESTION OF STANDARD COSTING

BY SIR KSM

REFRESHMENT QUESTION:
Question 01: (Spring 2020)
Question 02: (September 2014)
Question 03: (September 2017)
Question 04: (March 2007)
Question 05: (Spring 2019)
Question 06: (Workback Question)
Question 07: (March 2008)
Question 08: (March 2010)
Question 09: (March 2014)
Question 10:
Question 11: (CA Final Question)
Question 12:
Shaheen Chemicals Company operates a standard cost card system. Their standard material cost for a
normal mix of one tonne of chemical “P-20” is based on following parameters, Company is
manufacturing a single product:

Raw Material Quantity (Kg) Standard Price (Per Kg Rs.)

A-10 300 8
B-20 350 6
C-30 600 12

During the month 8.5 tonnes of “P-20” were produced, which required input of:

Raw Material Actual Consumption (Kg) Standard Price (Per Kg Rs.)

A-10 2,800 23,100
B-20 2,900 17,690
C-30 5,500 67,100
TOTAL 107,890

Required:
Material Variance Analysis of Total Cost, price, usage, mix and yield. (Marks
12)
Question 13: (Prepared by Sir KSM)
Majeed Limited produces a specific sheesha flavour Jack Sparrow. 4 Kg’s of X is added to 1 Kg of Z and
heated for 4 hours. No loss is observed in the first process. A second process is initiated with the
introduction of material Y which 1/4 of the total input. This process results in a yield of 80%. Output is
Sold in 200 grams packets in the market for Rs. 10,000 per pack, resulting in a profit of 12% of sales
price. Per gram cost of Y and Z is Rs. 25 and Rs. 33 respectively.

Actual boxes produced and sold was 13,000. Actual Material Used were enough to produce 13,200 units.
Y used 60% of X. Ratio of Z used in comparison with Y is 2/3rd. Price Variance for X is Rs. 3,300,000
adverse and Price Variance for Z is Rs. 990,000 favourable.

Actual Cost of Raw Material used Rs. 115,830,000.

Required:
• Calculate actual quantity of material used for X, Y and Z.
• Calculate price variance of Y.
• Calculate Usage Mix and Yield Variance.

HINT: Break the Question into bullet points.

Question 14: (March 2016)
Question 15: (September 2009)