Single Material :: Material Variances : Problems and Solutions

Problem 1

In manufacturing a product 'GERBER', the standard quantity of material was fixed at 10 kg and the standard price was 200 per kg. The actual quantity consumed was 12 kg and the actual price was 190 per kg. Calculate all possible Material variances.

Solution
[MCV = − 280 ; MPV = − 380; MUV/MQV = − 100 ; MMV = 0 and MYV/MSUV = − 100;]

Problem 2

Mankad Sons manufacture a product 'PRICEY'. It is estimated that for each ton of material consumed 80 articles should be produced. The standard price per ton of material 12,300. During the first week of January, 120 tons of materials were issued for production, the price of which was 12,960 per ton. Production during the week was 9,240 articles. Compute the variances.

Solution
[MCV = − 1,34,550 ; MPV = − 79,200; MUV/MQV = − 55,350; MMV = 0; MYV/MSUV = − 55,350;]

Problem 3

A furniture manufacturer uses Sunmica tops for tablthe following information, find out Price variance, Usage variance and Joint variance:

Standard Quantity of Sunmica per table 4 sq. ft.
Standard price per sq. ft. of Sunmica 5.00.
Actual production of tables 1,000
Sunmica actually used 4,300 sq.ft.
Actual purchase price of Sunmica per sq. ft.     5.50
Who is responsible for the above variances?

Solution
[MCV = − 3,650 ; MPV = − 2,150; MUV/MQV = − 1,500; MMV = 0; MYV/MSUV = − 1,500;]

Problem 4

Standard output 600 units
Actual output 500 units
Std. qty. per unit 1 kg.
Total actual qty.used     600 kg.
Std. rate per unit 14 per kg.
Actual rate per unit 15 per kg.
Calculate the material price variance, the materials usage variance, material cost variance, materials mixture variance and the material yield variance.

Solution
[MCV = − 2,000 ; MPV = − 600; MUV/MQV = − 1,400; MMV = 0; MYV/MSUV = − 1,400;]

Problem 5

The standard material required to manufacture one unit of product 'A' is 10 kg and the standard price per kg. is 3.00. In the month of March, 300 units of product 'A' were produced by using 3,300 kg. of material at a cost of 10,230.
Calculate variances.

Solution
[MCV = − 1,230 ; MPV = − 330; MUV/MQV = − 900; MMV = 0; MYV/MSUV = − 900;]

Practice Problem 1

The standard cost of "material" for the making of 5 units of a certain product are estimated as under;

Material 80 kg. @ 1.50 per kg. On completion of the production of 5 units, it was found that 75 kg. of material costing 1.75 per kg. has been consumed.
You are required to analyse the material variances:

Solution
[MCV = − 11.25 ; MPV = − 18.75; MUV/MQV = + 7.50 ; MMV = 0 and MYV/MSUV = + 7.50.]

Practice Problem 2

The standard cost card of a manufacturer shows the following details relating to the materials:

Standard Price = 2 per unit
Standard quantity = 4,000 units
Actual price = 2.50 per unit
Actual usage of materials = 4,100 units.
Calculate Material Variances.

Solution
[MCV = − 2,250 ; MPV = − 2,050; MUV/MQV = − 200 ; MMV = 0 and MYV/MSUV = − 200.]

Practice Problem 3

You have gathered the following information in respect of a product 'Y':
Standard output 1,200 units
Actual output 1,000 units
Standard quantity for Standard output     1,200 kg.
Actual quantity used 1,100 kg.
Standard price 7.00 per kg.
Actual price 7.50 per kg.
Calculate Material Variances.

Solution
[MCV = − 1,250 ; MPV = − 550; MUV/MQV = − 700; MMV = 0 and MYV/MSUV = − 700;]

Practice Problem 4

Calculate the Material Variances from the given information.
Particulars Standard Actual
Material quantity per unit (Kgs) 2.00 2.20
Price per kg 14.00 15.00
Actual production or output 100 units

Solution
MCV = − 500 ; MPV = − 220; MUV/MQV = − 280; MMV = 0 and MYV/MSUV = − 280;]

Practice Problem 5

Standard Price of material     5 per lb
Standard Quantity 10 lbs of material per unit of output
Standard Production: 100 units
Actual Production: 90 units
Actual Material Used: 1,180 lbs
Find Material Variances.

Solution
[MCV = – MPV = – MUV/MQV = − 1,400; MMV = 0 and MYV/MSUV = − 1,400; ]

Author : The Edifier