# Two or More Materials :: Revision of Standards : Problems and Solutions

# Problem 1

From the following information, calculate the material variances.

Due to shortage of material A, it was decided to reduce consumption of A by 15% and increase that of material B by 30%.

Materials | Standard | Actual |
---|---|---|

A | 200 units @ 12 | 160 units @ 13 |

B | 100 units @ 10 | 140 units @ 10 |

**Solution**

# Problem 2

From the following information calculate the Material Variances:

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.

Materials | Standard Quantity | Actual Quantity | Standard price per unit | Actual price per unit |
---|---|---|---|---|

A | 100 | 150 | 5 | 5.50 |

B | 200 | 250 | 6 | 6.00 |

C | 300 | 400 | 4 | 3.50 |

**Solution**

# Problem 3

S.V.Ltd. manufactures a simple product, the standard mix of which is:

Calculate all possible material variances.

Material A | 60% at 20 per kg. |

Material B | 40% at 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 20 per kg. |

Material B | 95 | kgs | at 9 per kg. |

Input | 200 | kgs | |

Loss | 35 | kgs | |

Output | 165 | kgs |

**Solution**

# Problem 4

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 10 and of material 'DEVON' 8.00 whereas the actual cost of 'CEROM' and 'DEVON' is 11 and 9.00 per unit respectively.

Calculate the various variances that emerge.

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 10 and of material 'DEVON' 8.00 whereas the actual cost of 'CEROM' and 'DEVON' is 11 and 9.00 per unit respectively.

Calculate the various variances that emerge.

**Solution**

# Problem 5

Bharat Metal Works manufactures a single product, the standard mix of which is:

Material X 60% @ 20

Material Y 40% @ 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:

Calculate material variances.

Material X 60% @ 20

Material Y 40% @ 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:

Material X = | 210 kg | @ 20 | 4,200 |

Material Y = | 190 kg | @ 19 | 1,710 |

Input | 400 kg | 5,910 | |

Loss | 72 kg | – | |

Output | 328 kg | 5,910 |

Calculate material variances.

**Solution**

# Problem 6

Standard Products (Private) Ltd. Produces a single product, requiring 2 Kg. of materials per unit in the following ratio:

M - 60% @ 10/- per kg.

P - 40% @ 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.

Calculate all the variances.

M - 60% @ 10/- per kg.

P - 40% @ 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. | 3,780.00 |

P | 162 kg | @ 6/- per kg. | 972.00 |

Input | 540 kg. | 4,752.00 | |

Loss | 36 kg. | – | |

504 kg. | 4,752.00 |

**Solution**

# Practice Problems

Author : The Edifier