Page 142 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Unit 7: Variance Analysis

7.5 Review Questions Notes

1. Elucidate the various kinds of variances.

2. Write elaborately on the cost variance and their causes.

3. From the data given below, find out the material mix variance.
Consumption of 100 units of product.
Raw Material Standard Actual
A 40 units @ ` 50 per unit 50 units @ ` 50 per unit
B 60 units @ ` 40 per unit 60 units @ ` 45 per unit
4. From the following data, calculate materials yield variance.
Actual Standard Actual
Qty in Kg Price Qty in Kg Price
Material A 200 units ` 12 160 units ` 13
Material B 100 units ` 10 140 units ` 10
300 units 300 units
Standard loss allowed is 10% of input. Actual output is 275 units.

5. From the following, find out the material yield variance.
Actual Standard Actual
Qty in Kg Price Qty in Kg Price
Material A 60 units ` 3,000 300 units ` 15,300
Material B 40 units ` 1,200 200 units ` 5,600
Standard loss allowed is 10% of input and standard rate of scrap realization is ` 6 per unit.
Actual output is 440 units.
6. Find out the various labour variances from the following data:
Standard hours per unit = 20 Hours
Standard rate per unit = ` 5
Actual Production = 1000 units
Actual time taken = 20,400 Hours
Actual Rate paid = ` 4.80

7. From the following information calculate the labour variances:
Standard Actual
Number of men employed 100 90
Output in units 2,500 2,400
Number of working days in a month 20 18
Average wages per man per month ` 200 ` 198
8. A gang of workers normally consists of 30 men, 15 women and 10 boys. They are paid at
standard hourly rates as under:
Men ` 80
Women ` 60

Boys ` 40

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