Cosmopolitan’s

Valia C.L. College of Commerce & Arts.

Name: Aryan Jaiswal

Std: TyBaf
Div: A
Roll No: 61
Subject: Cost Accounting
Topic: Standard Costing & Variance Analysis.
Introduction:
Established in 2020, Aryan Pvt Ltd has emerged as a leading name in the Cookie industry,
specializing in the production of Cookie.With a dedication to excellence and innovation,
Aryan Pvt Ltd has earned a reputation for crafting cookie that tantalize the taste buds of
consumers nationwide. From the bustling streets of UttarPradesh, where our headquarters are
located, to the vibrant cities and serene landscapes across India, our Cookie have become a
beloved choice for quenching thirst and spreading joy.

Branches:
Uttar Pradesh (Headquarters)
Maharashtra
Andhra Pradesh
Ladakh
Goa
Kerala
Puducherry

Types of Cookie:
 Almond Cookie:
Almond cookies are popular treats made with almonds, enjoyed in various forms like almond
macaroons, Italian amaretti, and Chinese almond cookies. They have a crispy texture and
sweet flavor, making them a delightful treat across different cultures.

 Butter cookie:
Butter cookies are beloved for their rich, buttery flavor and tender texture. These versatile
treats can be shaped and decorated for various occasions, making them a popular choice for
holiday baking.

 Chocolate Cookie:
Chocolate chip cookies are claimed to have originated in the United States in 1938, when
Ruth Graves Wakefield chopped up a Nestlé semi-sweet chocolate bar and added the
chopped chocolate to a cookie recipe; however, historical recipes for grated or chopped
chocolate cookies exist prior to 1938 by various other authors.
Manufacturing Process:
 Mixing
The first step is mixing all the ingredients together for prepping dough. These include flour,
sugar, fat and more. All the ingredients are put into the mixers and the dough is prepared
once they are mixed properly. The things that matter the most in this part of the procedure
are:
the mixing time
and the dough temperature
Mixing is done in two or three stages at different mixing speed. The average mixing time is
10–15 minutes, which further changes depending on the characteristics of the flour.

 Moulding
The second step is moulding. In this, the dough is laminated into the sheets and then is passed
through the gauge rollers to get appropriate sheet thickness for cutting. It is in this step that
the biscuits are given different shapes and are cut into different sizes.
The duration of this step depends on the speed of the cutter or moulder, which further
depends on the variety of biscuits.

 Baking:
The moulded biscuits are put into the ovens for baking and the temperature is set accordingly.
The different kinds of ovens provide different baking options, like indirect fired, direct fired
and hybrid ovens. The particular option is chosen while keeping in mind the convenience,
cost and temperature.
The methods used in the ovens include convection, conduction and radiation. And the
moisture in the oven is controlled with the dampers lying inside the oven.

 Cooling
The baked biscuits are cooled naturally prior to packing, by placing them on the cooling
conveyors. The cookies are cooled until the temperature comes down to the room
temperature. Though the choice of forced cooling is also there, the natural cooling helps in
maintaining the texture quality of the biscuit.

 Packing
Once the cooling process is complete, the cookies are then fed into the packing machine. The
different types of packaging materials include slug packs, family packs, pouch packs and
more. After that, the biscuits are packed into the big cartons for transporting them to the
retailers.

So, that was the process for the manufacturing of cookies, which is used in all the plants.
Whether you are using the automatic or semi-automatic cookie machines, the process remains
the same.

Labour:
70000+ workers working
Salary Monthly Basis:
Skilled – 22000
SemiSkilled – 20000
Unskilled – 15000
Workers:
Men – 30000
Women – 10000
Boys – 30000
Timing:
Men – 12 hour is normal working time, if over time than 15 hour.
Women – 8 hour normally, if over time than 10 hour.
Boys – 10 hour normally, if over time they want to do than its 12 hour.

Conclusion:
Aryan Pvt Ltd is committed to producing high-quality of Cookies that delight consumers
with their refreshing flavors and superior quality. With a focus on innovation, customer
satisfaction, and sustainable practices, the company continues to be a trusted name in the
Cookie Industry.
1) Material Variance:
Standard 50 Units Standard for Actual Actual 11000 Units
11000 Units
Particulars Qty Rate Amt Qty Rate Amt Qty Rate Amt
Maida 4 40 160 880 40 35200 1000 50 50000
Butter 50 100 5000 11000 100 1100000 12000 80 960000
Milk 2 500 1000 440 500 220000 500 600 300000
Total 56 12300 13500

(1) Material Cost Variance:

Standard Material – Actual Material

Maida = 32500-50000 = 17500(A)

Butter = 1100000-960000 = 140000(F)

Milk = 220000-300000 = 80000(A)

Total 42500(F)
(2) Material Price Variance:
(Standard price – Actual price) * Actual Quantity

Maida = (40-50) X 1000 = 10000(A)

Butter = (100-80) X 12000 = 240000(F)

Milk = (500-600) X 500 = 50000(A)

Total 180000(F)
(3) Material Usage Variance:
(Standard Quantity-Actual Quantity) * Standard Price
Maida = (880-1000) X 40 = 4800(A)
Butter = (11000-12000) X 100 = 100000(A)
Milk = (440-500) X 500 = 30000(A)
Total 134800(A)

Verification:
Material Cost Variance = Material Price Variance + Material Usage Variance
42500(A) = 180000(F) + 134800 (A)
Calculation of Revised Quantity
Revised Quantity = Actual Quantity Total X Standard Quantity
Standard Quantity Total

Maida = 13500 X 880 = 964.29

12300
Butter = 13500 X 11000 = 12053.57
12300
Milk = 12500 X 440 = 482.14
12300

(4) Material Yield Variance

(Standard Quantity-Revised Quantity) X Standard Price
Maida = (880-964.29) X 40 = 3371.6(A)
Butter = (11000-12053.57) X 100 = 105357(A)
Milk = (440-482.14) X 500 = 21070(A)
Total 129798.6(A)

(5) Material Mix Variance

(Revised Quantity-Actual Quantity) *Standard Price
Maida = (964.29-1000) X 40 = 1428.4(A)
Butter = (12053.57-12000) X 100 = 5357(F)
Milk = (482.14-500) X 500 = 8930(A)
Total 5001.4
2)Labour Variance:

Standard 50 Units
Standard for Actual Actual 11000 Units
11000 Units
Particulars Hour Rate Cost Hour Rate Cost Hour Rate Cost
Skilled 100 80 8000 22000 80 17600000 25000 82 20500000
Semiskilled 80 70 5600 17600 70 1232000 18000 65 1170000
Unskilled 160 60 9600 35200 60 2112000 30000 62 1860000
Total 340 74800 73000

(1) Labour Cost Variance:

Standard labour Cost – Actual labour Cost
Skilled = 1760000-2050000 = 290000(A)
Semiskilled = 1232000-1170000 = 62000(F)
Unskilled = 2112000-1860000 = 252000(F)
Total 24000(A)

(2) Labour Rate Variance:

(Standard Rate-Actual Rate) X Actual Hour
Skilled = (80-82) X 25000 = 50000(A)
Semiskilled = (70-65) X 18000 = 90000(F)
Unskilled = (60-62) X 30000 = 60000(A)
Total 20000(F)

(3) Labour Hour Variance:

(Standard Hour-Actual Hour) X Standard Rate
Skilled = (22000-25000) X 80 = 240000(A)
Semiskilled = (17600-18000) X 70 = 28000(A)
Unskilled = (35200-30000) X 60 = 312000(F)
Total 44000(F)
Verification
Labour Cost Variance = Labour Rate Variance + Labour Hour Variance
24000(A) = 20000(F) + 44000(F)
Calculation of Revised Hour
Revised Quantity = Standard Hour X Actual Total
Standard Total

Skilled = 22000 X 73000 = 21470.59

74800

Semiskilled= 17600 X 73000 = 17176.47

74800

Unskilled = 35200 X 73000 = 34352.94

74800

(4) Labour Mix Variance:

(Revised Hour-Actual Hour) X Standard Rate
Skilled = (21470.59-25000) X 80 = 282352.8(A)
Semiskilled = (17176.47-18000) X 70 = 57647.1(A)
Unskilled = (34352.94-30000) X 60 = 261176.4(F)
Total 78823.5(A)

(5) Labour Yield Variance

(Standard Hour-Revised Hour) X Standard Rate
Skilled = (22000-21470.59) X 80 = 42352.8(F)
Semiskilled = (17600-17176.47) X 70 = 29647.1(F)
Unskilled = (35200-34352.94) X 60 = 50823.6(F)
Total 122823.5(F)
3)Fixed Overhead Variance:

Budget 50 Units Standard for Actual Actual 11000 Units

11000 Units
Particulars Hour Rate OH Hour Rate OH Hour Rate OH
Rent 50 50 2500 11000 50 550000 12000 60 720000
Salary 35 15 525 7700 15 115500 8000 20 160000
Electricity 45 20 900 9900 20 198000 10000 30 300000
Total 3925 786500 1180000

(1) Fixed Overhead Cost Variance

Standard Fixed Overhead – Actual Fixed Overhead
Rent = 550000-720000 = 170000(A)
Salary = 115500-160000 = 44500(A)
Electricity = 198000-300000 = 102000(A)
Total 316500(A)

(2) Fixed Overhead Volume Variance

(Standard Fixed Overhead-Budgeted Fixed Overhead)
Rent = 550000-2500 = 547500(F)
Salary = 115500-525 = 114975(F)
Electricity = 198000-900 = 197100(F)
Total 859575(F)

(3) Fixed Overhead Expenditure Variance

Budgeted Fixed Overhead – Actual Fixed Overhead
Rent = 2500-720000 = 717500(A)
Salary = 525-160000 = 159475(A)
Electricity = 900-300000 = 299100(A)
Total 1176075(A)
Verification
Fixed Overhead Cost Variance = Fixed Overhead Volume Variance + Fixed Overhead
Expenditure Variance
316500(A) = 859575(F) – 1176075(A)

(4) Fixed Overhead Efficiency Variance

(Standard Hour-Actual Hour) X Standard Rate
Rent = (11000-12000) X 50 = 5000(A)
Salary = (7700-8000) X 15 = 4500(A)
Electricity = (9900-10000) X 20 = 2000(A)
Total 11500

(5) Fixed Overhead Capacity Variance

(Actual Hour-Budgeted Hour) X Standard Rate
Rent = (12000-50) X 50 = 597500(F)
Salary = (8000-35) X 15 = 119475(F)
Electricity = (10000-45) X 20 = 199100(F)
Total 916075(F)
5)Variance:
Budgeted Actual
Product Qty Price Cost Qty Price Cost
Almond 50000 60 3000000 55000 65 3575000
Butter 60000 70 4200000 63000 75 4725000
Chocolate 40000 50 2000000 50000 55 2750000
Total 150000 168000

(1) Sales Value Variance:

Budgeted Sales Value-Actual Sales Value
Almond = 3000000-3575000 = 575000(F)
Butter = 4200000-4725000 = 525000(F)
Chocolate = 2000000-275000 = 750000(F)
Total 1850000(F)

(2) Sales Price Variance:

(Budgeted Price – Actual Price) X Actual Quantity
Almond = (60-65 ) X 55000 = 275000(F)
Butter = (70-75) X 63000 = 315000(F)
Chocolate = (50-55) X 50000 = 250000(F)
Total 840000(F)

(3) Sales Volume Variance:

(Budget Quantity-Actual Quantity) X Budgeted Price
Almond = (50000-55000) X 60 = 300000(F)
Butter = (60000-63000) X 70 = 210000(F)
Chocolate = (40000-50000) X 50 = 500000(F)
Total 1010000(F)
Verification:
Sales Value Variance = Sales Price Variance-Sales Volume Variance
1850000(F) = 840000(F)-1010000(F)
Calculation of Revised Quantity
Total of Actual X Budgeted Quantity
Total of Budgeted Quantity

Almond = 168000 X 50000 = 56000

150000

Butter = 168000 X 60000 = 67200

150000

Chocolate = 168000 X 40000 = 44800

150000

(4) Sales Mix Variance:

(Revised Quantity- Actual Quantity) *Budgeted Price
Almond = (56000-55000) X 60 = 60000(A)
Butter = (67200-63000 )X 70 = 294000(A)
Chocolate = (44800-50000) X 50 = 260000(F)

Total 94000(A)

(5) Sales Yield Variance:

(Budgeted Quantity – Revised Quantity) X Budgeted Price
Almond = (50000-56000) X 60 = 360000(F)
Butter = (60000-67200) X 70 = 504000(F)
Chocolate = (40000-44800) X 50 = 240000(F)

Total 1104000(F)
  Origin Of Idea
The idea of combining chocolate with cookies likely emerged from the desire to create new
and delicious treats by incorporating chocolate into existing baked goods. In the case of
chocolate chip cookies.
Over time, as chocolate became more accessible and versatile, the idea of chocolate cookies
evolved beyond just chocolate chips. Bakers began experimenting with cocoa powder,
chocolate chunks, and other chocolate ingredients to create a wide range of chocolate cookie
variations, each offering its own unique flavor and texture.
Ultimately, the idea of chocolate cookies likely came to mind through a combination of
experimentation, creativity, and a love for both chocolate and cookies. The resulting creations
have since become beloved treats enjoyed by people all over the world.