Material Variances :: Problems : Two or More Materials Stocks

Problems » Solutions  
 
01. From the data given below, calculate.
(a) Individual material price variances for the two materials X and Y assuming that price variances are calculated at the time of purchase;
(b) Individual material usage variances for materials X and Y assuming that there was no work-in-progress either at the commencement or at the end of the period.

  'X' 'Y'
Qty.
Kg.
Value
Rs.
Qty.
Kg.
Value
Rs.
Raw Material Purchase
Issues to works
Works stock of material : -
Opening
Closing
2,000
2,150

300
200
4,000



5,000
3,950

1,000
1,250
6,250



Standard price:- Material X - Rs 1.90 per kg.
Material Y - Rs 1.30 per kg.

Standard usage:-
  Marterial X Marterial Y
Producti A 1 kg. 1 kg.
Producti B 0.5 kg. 1 kg.

Output during the period:-
Product A - 1,130 units
Product B - 2,550 units

Solution

02. A brass foundry, making castings which are transferred to the machine shop of the same company at a standard prices, uses a standard costing system.
Basic standards with regard to materials, stock of which are kept at standard prices are as follows:

Standard Mixture

Standard Price

Standard cost in melt
70% Copper
30% Zinc
Copper Rs. 240 per tonne
Zinc Rs. 65 per tonne
5% of input

Figures in respect of a costing period are as follows:
Opening stocks Copper 100 tonnes
Zinc 60 tonnes
Closing stocks Copper 110 tonnes
Zinc 50 tonnes
Purchases-Copper
Zinc
300 tonnes Cost Rs. 73,250
100 tonnes Cost Rs. 6,250
Material melted 400 tonnes
Casting Produced 375 tones
Present figures showing all possible material variances.

Solution

03. Adhrak Ltd. Produces an article by blending two basic materials. It operates a standard costing system and the following standards have been set for raw materials:
Material
 
Standard
Mix
Standard Price
per kg.
A 40% Rs. 4.00
B 60% Rs. 3.00

The standard loss in processing is 15%
During April 1995 the company produced 1,700 kgs.of finished output.
The position of stocks and purchases for the month of April 1995 is as under:
Material Stock on
1-4-95
Stock on
30-4-95
Purchased during
April 1995
  Kgs. Kgs. Kgs. Costs (Rs.)
A 35 5 800 3,400
B 40 50 1,200 3,000

Calculate all the material variances.

Solution

Practice Problems  
 
 
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