Page 143 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Cost and Management Accounting

Notes In a normal working week of 40 hours, the gang is expected to produce 2,000 units of
output.
During the week ended 31st Dec. 2004, the gang consisted of 40 men 10 women and 5 boys.
The actual wages paid were @ ` 70, ` 65 and ` 30 respectively 4 hours were lost due to
abnormal idle time and 1,600 were produced.
Calculate: (a) Labour cost variance (b) Wage variance (c) Labour effi ciency variance
(d) Gang composition variance (e) Labour idle time variance.
9. Calculate various overhead variances.
Items Budget Actual
No. of working days 20 22
Man hours per day 8,000 8,400
Output per man hour in units 1 .9
Overhead cost ` 1,60,000 ` 1,68,000
10. Maris Ltd. has furnished the following information for the month of July 1979.
Budget Actual
Output (Units) 30,000 32,500
Hours 30,000 33,000
Fixed overheads ` 45,000 ` 50,000
Variable overheads ` 60,000 ` 68,000
Working days 25 26
Calculate the variances:
(a) Total overhead variances
(b) Fixed overhead variances
(c) Variable overhead variances.

11. Vision Ltd. furnishes the following information relation to budgeted sales and actual sales
for June 1988.

Product Budgeted Actual
Qty Price (`) Qty Price (`)
A 1200 15 880 18
B 800 20 880 20
C 2000 40 2640 38
Calculate sales variance.

Answers: Self Assessment

1. ‘adverse’ or unfavourable 2. favourable variance

3. standard costing 4. standard cost
5. cost control 6. (b)
7. (d) 8. (d)
9. (c) 10. (c)

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