Answer 19 a A Actual Qty Actual Price Material X 1100 310 3410 Material Y 1800

Answer 19 a a actual qty actual price material x 1100

This preview shows page 124 - 127 out of 149 pages.

Answer 19. (a) A. Actual Qty × Actual Price B. Actual Qty × Standard Price C. Actual Qty (in standard mix) × Standard Price D. Standard Material Cost of actual yield (b) Material X: 1100 × 3.10 = 3410 Material Y: 1800 × 2.20 = 3960= 7370 Material X: 1100 × 3.00 = 3300 Material Y: 1800 × 2.00 = 3600= 6900 Material X: 2900 ×2/6 × 3.00 = 2900 Material Y: 2900× 4/6 × 2.00 = 3867= 6767 Standard cost for one unit of finished product (2 × 3 + 4 × 2) × actual yield (500 units) = 7000 Material Cost Variance = A – D = `370 (A) Material Price Variance = A – B = `470 (A) Material Mix Variance = B –C = `133 (A) Material Usage Variance = B –D = `100 (F) Material Yield Variance = C –D = `233 (F) A. Actual Qty× Actual Price 2500 × 3w/n 1= 7500 Directorate of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)Page 119
Background image
Work Book : Cost Accounting B. Actual Qty × Standard Price 2500 ×2 = 5000 C. [not required as there is only one product] D. Standard Material Cost of actual yieldw/n 2 2000 units × `2 (standard price) = 4000 Material Cost Variance = A – D = `3500(A) Material Price Variance = A – B = `2500 (A) Material Usage Variance = B –D = `1000 (A) w/n 1: actual price = Total cost of purchase (9000)÷ Quantity purchased (3000) = `3 w/n 2: Standard material required for 80 tonnes @ 25 units per tonne = (80 × 25) = 2000 units Material Price variance is not calculated at the point of purchase as is calculated in Q 4 (a) as the question is not specific about it. Students are advised to calculate material price variance if it is not specifically asked for in the question.(c) A. Actual Hours × Actual Rate 2300 hrs. × 3.8696 = 8900 B. Actual Hours × Standard Rate 2300 hrs × 5 = 11500 C. Cannot be calculated as there is only one labour. D. Cannot be calculated as there is no idle time. E. Standard labour cost for actual yield = 10000 (1000 units [product A] × 2 hours for each unit of yield of product A × standard hourly rate [`5]) Labour cost variance = A – E = 1100 (F) Labour rate variance = A – B = 2600 (F) Labour efficiency variance = B – E = 1500 (A) The direct labour total variance ‘indicates the difference between the standard direct labour cost of the output which has been produced and the actual direct labour cost incurred’. [CIMA official terminology] The direct labour rate variance ‘indicates the actual cost of any change from the standard labour rate of remuneration’. [CIMA Official Terminology] The direct labour efficiency variance is the ‘standard labour cost of any change from the standard level of labour efficiency’. [CIMA Official Terminology]Directorate of Studies, The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)Page 120
Background image
Work Book : Cost Accounting
Background image
Image of page 127

You've reached the end of your free preview.

Want to read all 149 pages?

  • Fall '18
  • mohammed
  • Cost Accounting, Institute of Cost Accountants of India

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture