UNIT – 3

STANDARD COSTING

1. From the following information calculate, Material Cost Variance separately

for P & Q

Material Standard Standard Actual Actual Price

Quantity Price Quantity
P 20 2 25 2.5
Q 30 3 35 2.75

2. A product Z requires 25 units of standard materials at the rate of Rs.5 per unit.
The actual consumption of material for the manufacturing of product Z came to
20 units of material at the rate of Rs.4 per unit. Calculate Material Price
Variance.

3. The Standard quantity and Standard price of raw material required for one unit
of product Z are given as follows.
Quantity
Standard Price
Material A 2kgs
Rs.2 per unit
Material B 6kgs
Rs.4 per unit
The actual production and relevant data are as follows: output 500 units of
product Z.
Quantity
Standard Price
Material A 1200kgs Rs.
3400 per unit
Material B 1600kgs Rs.
3900 per unit
Calculate, Material Usage Variance.
4. The standard material and standard cost per kg of material required for the
production of one unit of product R in as follows:
Material 10kgs
Standard price – Rs.4 per kg
The actual production and related material data are as follows:
500 units of product R
Material used 3000 kgs
Price of material Rs.5 per kg
Calculate: a) Material Cost Variance, b) Material Usage Variance, c) Material
Price Variance.

Shruthi H S
Assistant Professor
 5. Calculate the Material Mix Variance from the following data:
Particulars Standard Actual
R 40kgs @ Rs.50 per kg 50kgs @ Rs. 50 per kg
S 60kgs @ Rs.40 per kg 60kgs @ Rs. 45 per kg
100kgs 110kgs

6. Calculate material yield variance from the information given below:

particulars Standard Actual

Material X 200kgs @Rs.5 = Rs.1000 200kgs @Rs.5 = Rs.1000
Material Y 500kgs @ Rs.3= Rs.1500 500kgs @ Rs.3= Rs.1500
700kgs 700kgs
Less: Wastage 75kgs 100kgs
625kgs Rs.2500 600kgs Rs.2500

7. Given the following information calculate –

a) Material Cost Variance
b) Material Price Variance
c) Material Mix Variance
d) Material Mix Variance
e) Material Usage Variance and
f) Material Yield Variance.

Material
Qty Rate Amt Qty Rate Amt
X 500 5 2500 300 5 1500
Y 400 4 1600 600 4 2400
Z 300 3 900 400 3 1200
1200 1300
Less:10%
Normal Loss 120 Actual Loss 220
1080 5000 1080 5100

8. Calculate Labour Cost Variance with the information given below:

Actual Rate – Rs.4 per hour
Actual Hours – 16000 hours
Actual Production – 1200 units
Standard Rate – Rs.4.60 per hour
Standard hours per unit – 20.

9. M/S Anandi Ltd manufactures a particular article, the standard direct labour
cost of which is Rs.120 per unit as given below:

Shruthi H S
Assistant Professor
 Type of workers Hours Rate Amount Rate
X 20 3 60
Y 30 2 60
50 120
During a period, 110 units of the article were manufactured, the actual labour
cost of which was as follows:

Type of workers Hours Rate Amount Rate

X 4000 2 8000
Y 2000 3 6000
6000 14000
Calculate Labour Rate Variance.

10. Sri Shanmugam & Sons Furnishes you the following data. Compute Labour
Efficiency Variance.
Standard labour hours unit 50 hours
Standard labour rate per hour Rs.4
Actual production 100 units
Actual labour rate per unit RS.5
Actual labour for production 4000 hour.

11. 100 workers are working in a factory at a standard wage rate of Rs.4.80 per
hour. The standard performance is set at 360 units per hour. The actual
production was 56000 units. There was a power failure which stopped
production for 2 hours. Calculate idle time variance.

12. A reputed firm gives the detail of grade A & B worker the standard direct
labour cost of which is Rs.100 per unit. The details are given below:

Grade of workers Hours Rate Amount

A 25 2.5 62.50
B 20 2 40.00
45 102.50
During a period 80 unit of the product were produced, the actual labour cost of
which are as follows:

Grade of workers Hours Rate Amount

A 3000 2 6000
B 1600 3 4800
4600 10800
Calculate Labour Material Variance.

13. Standard Time 1500 hours

Standard Rate Rs.15 per hour
Shruthi H S
Assistant Professor
 Actual Output 450 units
Standard Output 500 units
Calculate Labour Yield Variance.

14. The details regarding the composition and the weekly wages rates of labour
force engaged on a job scheduled to be completed in 30 weeks are as follows.

Standard Actual
Category of No. of Weekly wage No. of Weekly
workers Labourers Rate per Labourers wage
labourers Rate per
labourer
Skilled 75 60 70 70
Semi- skilled 45 40 30 50
unskilled 60 30 80 20
The work is actually completed in 32 weeks calculate the various labour
variances.

15. The standard material required to manufacture 1 unit of product ‘X’ is 10kgs
and the standard price per kg of material is Rs.25. The cost accounts records
however reveal that 1150kgs materials costing Rs.275000 were used for
manufacturing 1000 units of product X. Calculate Material Variance.

16. The standard materials required for producing 200 units is 250kgs. The
standard price of 0.60 paise per kg 250000 units were produced during the
period. Actual materials purchased were 320000kgs at a cost of Rs.195200.
From the above calculate:
a) Material Cost Variance
b) Material Price Variance
c) Material Usage Variance.

17. The following information is obtained from a standard cost card.

Labour rate – Rs.1.80 per hour
Hours – 4 hours per unit
Actual production data are: units produced – 400 units
Labour rate – Rs.1.90 per hour
Hour worked – 1500
Calculate : a) Labour Cost Variance
b) Labour Rate Variance
c) Labour Efficiency Variance.

18. The standard material cost to prepare a ton of chemical X is

Shruthi H S
Assistant Professor
 200kgs of material A @ 10 per kg
300kgs of material B @ 5 per kg
400kgs of material C @ 7 per kg
During a year 100 tons of material X were produced from the usage of
30 tons of materials A at a cost of Rs.9 per ton
40 tons of materials B at a cost of Rs.6 per ton
50 tons of materials C at a cost of Rs.7 per ton
Calculate: a) Material Cost Variance b) Material Price Variance c) Material
Usage Variance.

19. The details regarding the standard cost card relating to material needed to
produce 1 kg of groundnut oil: Quantity of groundnut required 3kgs. Price of
groundnut Rs.2.50 per kg.
Actual production data: Production during the month 1000kgs.
Quantity of material used 3500 kgs.
Price of groundnut Rs.3 per kg.
Calculate : a) Material Cost Variance b) Material Price Variance c) Material
Usage Variance.

20. In a factory 100 workers are engaged and the average rate of wage is 50paise
per hour. Standard working hours per week are 40 and the standard
performance is 10 units per gang hour. During a week in March, wages paid for
50 workers were at the rate of 50paise per hour, 10 workers at 70paise per hour
and 40 workers at 40paise per hour. Actual output was 380 units. The factory
did not work for five hours due to breakdown of machinery. Calculate
appropriate labour Variances.

21. The following details are available from the records of ABC Ltd engaged in
manufacturing article A for the week ended 28th September.

Hours Rate per hour Total

Skilled Labour 10 3 30
Semi- skilled Labour 8 1.50 12
Unskilled Labour 16 1 16
58

The actual production was 1000 articles of A for which the actual hours
worked and rates are given below:

Shruthi H S
Assistant Professor
 Hours Rate per hour Total
Skilled Labour 9000 4 36000
Semi- skilled Labour 8400 1.50 12600
Unskilled Labour 20000 0.90 18000
66600

Form the above set of data you are required to calculate:

a)Labour Cost Variance b) Labour Rate Variance c) Labour
Efficiency Variance d) Labour Mix Variance.

22. The standard mix to produce one unit of product is as

follows:
Material A – 60 units @ Rs. 15 per unit = Rs.900
B – 80 units @ Rs. 20 per unit = Rs.1600
C – 100 units @ Rs. 25 per unit = Rs.2500
240 units Rs.5000
During the month of April, 10 units were actually produced and consumption
was as follows:
Material A – 640 units @ Rs. 17.50 per unit = Rs.11200
B – 590 units @ Rs. 18.00 per unit = Rs.17100
C – 870 units @ Rs. 27.50 per unit = Rs.23925
2460 units Rs.52225

Calculate all material variances.

Shruthi H S
Assistant Professor