01. 
From the following information, calculate the material variances.
Materials 
Standard 
Actual 
A 
200 units @ Rs.12 
160 units @ Rs.13 
B 
100 units @ Rs.10 
140 units @ Rs.10 
Due to shortage of material A, it was decided to reduce consumption of A by 15% and increase that of material B by 30%.
Solution

02. 
From the following information calculate the Material Variances:
Materials 
Standard Quantity 
Actual Quantity 
Standard price per unit Rs. 
Actual price per unit Rs. 
A 
100 
150 
5 
5.50 
B 
200 
250 
6 
6.00 
C 
300 
400 
4 
3.50 
Due to shortage of B, it was decided to reduce consumption of B by 20 units and increase that of A and C by 15 units and 5 units respectively.
Solution

03. 
S.V.Ltd. manufactures a simple product, the standard mix of which is:
Material A 
60% at Rs.20 per kg. 
Material B 
40% at Rs.10 per kg. 
Normal loss in production is 20% of input. Due to shortage of Material A, the standard mix was changed. Actual results for March, 1989 were:
Material A 
105 
kgs 
at Rs. 20 per kg. 
Material B 
95 
kgs 
at Rs. 9 per kg. 
Input 
200 
kgs 
Loss 
35 
kgs 
Output 
165 
kgs 
Calculate all possible material variances.
Solution

04. 
For producing 100 units of 'Avlon', 40 units of 'CEROM', and 60 units of 'DEVON' are to be mixed.
Actually 1,000 units of 'Avlon' were produced, but the standard mix was changed (due to shortage of material 'CEROM') to 30 units of 'CEROM' and 70 units of 'DEVON' for production of 100 units.
The actual number of units used were 320 units of 'CEROM' and 750 units of 'DEVON'.
The standard cost per unit of materials 'CEROM' was Rs. 10 and of material 'DEVON' Rs. 8.00 whereas the actual cost of 'CEROM' and 'DEVON' is Rs. 11 and Rs. 9.00 per unit respectively.
Calculate the various variances that emerge.
Solution

05. 
Bharat Metal Works manufactures a single product, the standard mix of which is:
Material X 60% @ Rs. 20
Material Y 40% @ Rs. 10
Normal loss in production is 20 per cent of input. Due to shortage of Material X, the standard mix was changed. Actual results for January were:

Rs. 
Material X = 
210 kg 
@ Rs. 20 
4,200 
Material Y = 
190 kg 
@ Rs. 19 
1,710 
Input 
400 kg 

5,910 
Loss 
72 kg 

– 
Output 
328 kg 

5,910 
Calculate material variances.
Solution

06. 
Standard Products (Private) Ltd. Produces a single product, requiring 2 Kg. of materials per unit in the following ratio:
M  60% @ Rs.10/ per kg.
P  40% @ Rs.5/ per kg.
To this 10% normal loss is added to arrive at input.
During a particular period, on account of shortage of P, the mix was changed and the actual results were as follows for an output of 250 units.
M 
378 kg 
@ 10/ per kg. 
Rs. 3,780.00 
P 
162 kg 
@ 6/ per kg. 
Rs. 972.00 
Input 
540 kg. 

Rs. 4,752.00 
Loss 
36 kg. 
– 

504 kg. 

Rs. 4,752.00 
Calculate all the variances.
Solution

