162.Carpenter Gems began the year with a net pension liability of $84 million
(underfunded pension
plan). Pension expense for the year included the following ($ in millions): service
cost, $30;
intere
171.Crystal Company has an unfunded retiree health care plan. Each of the company's
four
employees has been with the organization since its inception at the beginning of
2012. As of the end of 2013, t
computation is as follows: Variable Overhead Expenditure Variance =
Standard Variable Overheads for Standard Production Actual
Variable Overheads. C] Variable Overheads Effi ciency Variance: It
indica
that indicates more number of working hours than budgeted. 4. Effi
ciency Variance: Standard Rate [Standard Quantity Actual Quantity]
Re.1 [1, 70, 100 1, 53, 090] = Rs.17, 010 [F] 5. Volume Variance:
380 Material P = 20, 000/1000 X 450 = 9, 000 kg Material Q = 20,
000/1000 X 400 = 8, 000 kg Material R = 20, 000/1000 X 250 = 5, 000
kg 4. Material Mix Variance: Standard Cost of Standard Mix
Standar
Rs.7] = Rs.53, 000 [A] Total Material Price Variance = Rs.60, 000 [A]
III] Material Quantity Variance = Standard Price [STD Quantity
Actual Quantity] Material A = Rs.10 [30, 000 35, 000] = Rs.50, 000
Standards Actual Material A 2 kg @ Rs.2 per kg = Rs.4 Material A 8
kg @ Rs.3 per kg = Rs.24 Material B - 8 kg @ Rs.8 per kg = Rs.64
Material B 4 kg @ Rs.7 per kg = Rs.28 Material Cost Variance =
Stand
Fixed Overheads Volume Variance: This variance indicates the
under/over absorption of fi xed overheads due to the difference in the
budgeted quantity of production and actual quantity of production. I
material B @ Rs.5 per kg 500 kg of material C @ Rs.6 per kg During a
particular period, 100 tons of mixture X was produced from the usage
of 35 tons of material A @ Rs.9, 000 per ton 42 tons of materi
production is 20% of input. Due to shortage of material A, the
standard mix was changed and the actual mix was as follows:
Material A 105 kg at Rs.20 per kg Material B 95 kg at Rs.9 per kg
Actual loss
was possible due to the machine breakdown. 810 units of the product
was recorded as output of the gang during the month. Calculate
various labour variances. 363 Solution: The following table is
prepar
variance will be always adverse and will be computed as shown
below. Idle Time Variance = Abnormal Idle Time X Standard Rate. The
following chart will show the relationships between various labour
var
less than the standard rate. The labour rate variance is that portion of
direct labour cost variance, which is due to the difference between the
labour rates. III] Labour Effi ciency Variance: It is o
due to this change or how much is the gain due to this change is
indicated by this variance. The computation is done with the help of
the following formula. Labour Mix Variance = Standard Cost of
Stan
Price Variance =Rs.60[F] Material Mix Variance Standard Cost of
Standard Mix Standard Cost of Actual Mix Rs.520 Rs.540 =
Rs.20[A] 369 4. Mixers Ltd. is engaged in producing a standard mix
using 60 kg
Actual Mix Note: Standard Cost of Standard Mix is computed as
shown below. 5. Material Yield Variance: Standard Yield Rate [Actual
Yield Standard Yield] 13. The standard material inputs required for
1
ciency Variance: Standard Rate [Standard Time Actual Time Worked]
Rs.6 [4160 # 3990] = Rs.1020 [F] IV] Labour Idle Time Variance:
Abnormal Idle Time X Standard Rate 210 hrs X Rs.6 = Rs.1260 [A] * As
s
of a manufacturing unit using standard costing system. Particulars
Standard Actual Production 4, 000 3, 800 Working Days 20 21 Fixed
Overheads Rs.40, 000 Rs.39, 000 Variable Overheads Rs.12, 000 Rs.12
standard output of 10, 000 units. Standard price per kg of material
Rs.20 Actual quantity of material issued and used by production
department 10, 000 kg Actual price per kg of material Rs.21 per kg
A
1,70,100 = Rs. 17,010 [A] V] Fixed overhead cost variance: Variance I +
II + III + IV = Rs.2, 910 [A] 10. ABC Ltd. produces an article by blending
two basic raw materials. It operates a standard costi
achieved arising due to the difference in the number of days worked
and budgeted. The formula for computation of this variance is as
follows. 365 Fixed Overheads Calendar Variance = Standard Rate
[Bud
Rs.53,600 Less: 10% Std. Loss 10 tons Less: Actual loss 18 tons
Standard Production 90 tons = Rs.26,000 182 tons = Rs.53, 600 I]
Material Price Variance - AQ [ SP AP] = Material A = 90[200-180]=
Rs.1,
Stock 35 kg @ Rs.4* = Rs.140.00 Purchases: 795 kg @ Rs.4.25 =
Rs.3,378.25 Total = Rs.3518.25 Material B: 60 kg X Rs.3 = Rs.180
Material B: Total Quantity Used = Opening Stock + Purchases Closing
Stock
standard fi xed overheads, it indicates the under absorption of fi xed
overheads and the variance is favourable. On the other hand, if the
actual overheads incurred are more than the standard fi xed
o
The standard cost of this mix would be, A: 4500 kg Rs.10 per kg =
Rs.45, 000 377 B: 1500 kg Rs.50 per kg = Rs.75, 000 Total = Rs.1, 20,
000 Standard cost of actual mix is computed by multiplying the a