01. 
If the production of 200 litres of product MAGNA requires a standard mix of:
Material P 40 lbs @ Standard cost Rs. 12.50/lb,
Material Q 50 lbs @ Standard cost Rs. 15.00/lb,
Material R 75 lbs @ Standard cost Rs. 10.00/lb,
Find out the standard cost of this material mix.
Solution
[Rs. 2,000]

02. 
From the following information compute material variances
Materials 
Standard 
Actual 
Quantity (Kilos) 
Unit Price Rs. 
Total
Rs. 
Quantity (Kilos) 
Unit Price Rs. 
Total
Rs. 
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 = + Rs. 40 ; TMPV = + Rs. 12; TMUV/MQV = + Rs. 28;
TMMV = − Rs. 8 ; TMYV/MSUV = + Rs. 36;]

03. 
From the data give below, calculate materials variances.

Consumption for 120 units of production 
Raw Materials 
Standard 
Actual 
A 
65 units @ Rs. 50 per unit 
80 units @ Rs. 50 per unit 
B 
35 units @ Rs. 40 per unit 
40 units @ Rs. 45 per unit 
Solution
[TMCV = − Rs. 1,150 ; TMPV = − Rs. 200; TMUV/MQV = − Rs. 950;
TMMV = − Rs. 20 ;TMYV/MSUV = − Rs. 930; ]

04. 
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 
Rs. 
lbs 
lbs 
Rs. 
A 
15 
6 
224 
18 
B 
3 
8 
282 
3 
C 
6 
5 
140 
4 


19 
646 

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

05. 
From the following details, calculate material variances

Standard 
Actual 
Production in units
 2,000 
1,800 
Materials per unit: 


Max 
4 kg @ Rs. 12/kg 
5.6 kg. @ Rs. 14/kg 
Dax 
2 Kg @ Rs. 6/kg 
2.8 kg. @ Rs. 5/kg 
Solution
[TMCV = − Rs. 58,320; TMPV = − Rs. 15,120; TMUV/MQV = − Rs. 43,200;
TMMV = Nil ; TMYV/MSUV = − Rs. 43,200;]

06. 
From the following figures given to you, calculate material variances. Production for the period 184 units:

Material X 
Material Y 
Standard Price Per Ton
 Rs. 240 
Rs. 320 
Actual Price Paid per Ton 
Rs. 230 
Rs. 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 = + Rs. 531.60; TMPV = + Rs. 306; TMUV/MQV = + Rs. 225.60;
TMMV = − Rs. 165; TMYV/MSUV = + Rs. 390.60; ]

07. 
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. 
Rs. 4 per kg. 
Material II 
5 kg. 
Rs. 3 per kg. 
Total 


The actual production and relevant data are as follows:
Output 500 units of the Product
Material
 Total Quantity for 500 units
 Total cost Rs.

I 
1,600 kg. 
6,880 
II 
2,400 kg. 
7,440 
Caluculate variances.
Solution
[TMCV = − Rs. 820; TMPV = − Rs. 720; TMUV/MQV = − Rs. 100;
TMMV = Nil ;TMYV/MSUV = − Rs. 43,200;]

08. 
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 (Rs. 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 subvariance (MMSV)
Solution
[TMCV = – TMPV = – TMUV/MQV = –
TMMV = − Rs. 736; TMYV/MSUV = –]

09. 
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.
Rs. 
Material P 
12 lts @ Rs. 12.50/ltr 
150 
Material Q 
18 lts @ Rs. 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 = − Rs. 510;
TMMV = + Rs. 246; ; TMYV/MSUV = − Rs. 756;]
