Material Variances :: Problems involving Single Material

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

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

02. 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 Rs. 12,300. During the first week of January, 120 tons of materials were issued for production, the price of which was Rs. 12,960 per ton. Production during the week was 9,240 articles. Compute the variances.

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

03. A furniture manufacturer uses Sunmica tops for tables. From the following information, find out Price variance, Usage variance and Joint variance:

Standard Quantity of Sunmica per table4 sq. ft.
Standard price per sq. ft. of SunmicaRs. 5.00.
Actual production of tables1,000
Sunmica actually used4,300 sq.ft.
Actual purchase price of Sunmica per sq. ft.     Rs. 5.50
Who is responsible for the above variances?

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

04.
Standard output600 units
Actual output500 units
Std. qty. per unit1 kg.
Total actual qty.used     600 kg.
Std. rate per unitRs.14 per kg.
Actual rate per unitRs.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 = − Rs. 2,000 ; MPV = − Rs. 600; MUV/MQV = − Rs. 1,400; MMV = 0; MYV/MSUV = − Rs. 1,400;]

05. The standard material required to manufacture one unit of product 'A' is 10 kg and the standard price per kg. is Rs. 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 Rs. 10,230.
Calculate variances.

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

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

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

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

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

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

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

03. You have gathered the following information in respect of a product 'Y':
Standard output 1,200 units
Actual output1,000 units
Standard quantity for Standard output     1,200 kg.
Actual quantity used1,100 kg.
Standard priceRs. 7.00 per kg.
Actual priceRs. 7.50 per kg.
Calculate Material Variances.

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

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

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

05.
Standard Price of material     Rs. 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 = − Rs. 1,400; MMV = 0 and MYV/MSUV = − Rs. 1,400; ]

Author Credit : The Edifier

♣ Copyright Krishbhavara. All rights reserved ♣ Site optimized for Internet Explorer 5.5 and above