Two or More Materials :: Material Variances : Problems and Solutions

Problem 1

If the production of 200 litres of product MAGNA requires a standard mix of:

Material P 40 lbs @ Standard cost 12.50/lb,
Material Q 50 lbs @ Standard cost 15.00/lb,
Material R 75 lbs @ Standard cost 10.00/lb,
Find out the standard cost of this material mix.

Solution
[ 2,000]

Problem 2

From the following information compute material variances
MaterialsStandardActual
Quantity
(Kilos)
Unit
Price
Total

Quantity
(Kilos)
Unit
Price
Total

Material X 15 2.00 30.00 10 3.00 30.00
Material Y 20 3.00 60.00 16 2.50 40.00
Material Z 15 6.00 90.00 14 5.00 70.00
Total 50 3.60 180.00 40 3.50 140.00

Solution
[TMCV = + 40 ; TMPV = + 12; TMUV/MQV = + 28; TMMV = − 8 ; TMYV/MSUV = + 36;]

Problem 3

From the data give below, calculate materials variances.
Consumption for 120 units of production
Raw MaterialsStandardActual
A 65 units @ 50 per unit 80 units @ 50 per unit
B 35 units @ 40 per unit 40 units @ 45 per unit

Solution
[TMCV = − 1,150 ; TMPV = − 200; TMUV/MQV = − 950; TMMV = − 20 ;TMYV/MSUV = − 930; ]

Problem 4

Calculate from the following data: (a) Material Cost Variance; (b) Material Price Variance; (c) Material Usage Variance; (d) Material Mix variance and (e) Material Yield Variance.
Material Standard Price Standard Weight
per unit of output
Actual Weight
for output of
36 units
Actual price
per lb
lbs lbs
A 15 6 224 18
B 3 8 282 3
C 6 5 140 4
    19 646  

Solution
[TMCV = − 254 ; TMPV = − 392; TMUV/MQV = + 138; TMMV = − 150 ;TMYV/MSUV = + 288; ]

Problem 5

From the following details, calculate material variances
  Standard Actual
Production in units 2,000 1,800
Materials per unit:    
      Max 4 kg @ 12/kg 5.6 kg. @ 14/kg
      Dax 2 Kg @ 6/kg 2.8 kg. @ 5/kg

Solution
[TMCV = − 58,320; TMPV = − 15,120; TMUV/MQV = − 43,200; TMMV = Nil ; TMYV/MSUV = − 43,200;]

Problem 6

From the following figures given to you, calculate material variances. Production for the period 184 units:
  Material X Material Y
Standard Price Per Ton 240 320
Actual Price Paid per Ton 230 308
Actual Weights 15 tons 13 tons
The standard production for the period represented by the above figures is 400 units for which the standard quantity allowance for material are 39 tons of X and 25 tons of Y.

Solution
[TMCV = + 531.60; TMPV = + 306; TMUV/MQV = + 225.60;
TMMV = − 165; TMYV/MSUV = + 390.60; ]

Problem 7

The standard quantity and standard price of raw material required for one unit of a product are given as follows:
  Quantity SP
Material I 3 kg. 4 per kg.
Material II 5 kg. 3 per kg.
Total
8 kg.
 

The actual production and relevant data are as follows:

Output 500 units of the Product

Material Total Quantity
for 500 units
Total cost
I 1,600 kg. 6,880
II 2,400 kg. 7,440

Caluculate variances.

Solution
[TMCV = − 820; TMPV = − 720; TMUV/MQV = − 100; TMMV = Nil ;TMYV/MSUV = − 43,200;]

Problem 8

ABC Ltd. uses the following standard and actual mix of their compound in one batch of its production line:

Materials Standard mix
(kg)
Standard rate
( per kg)
Actual Mix
(kg)
P 50 2.00 460
Q 30 3.00 540
R 20 4.00 710
Total 100 1,710

Calculate Material mix sub-variance (MMSV)

Solution
[TMCV = – TMPV = – TMUV/MQV = – TMMV = − 736; TMYV/MSUV = –]

Problem 9

Saw Pipes Ltd manufactures a product known as the M 100 by mixing two materials. The standard material cost per unit of the M 100 is as follows.
Material P 12 lts @ 12.50/ltr 150
Material Q 18 lts @ 15.00/ltr 270

In March, the actual mix used was 984 litres of P and 1230 litres of Q. The actual output was 72 units of M 100.

Calculate all possible Material Variances

Solution
[TMCV = – TMPV = – TMUV/MQV = − 510; TMMV = + 246; ; TMYV/MSUV = − 756;]

Practice Problems

 
Author : The Edifier