# 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.

SolutionAns: [2,000]

# Problem 2

From the following information compute material variances

Materials Standard Actual
Quantity
(Kilos)
Unit
Price
Total

Quantity
(Kilos)
Unit
Price
Total

Material X
Material Y
Material Z
15
20
15
2
3
6
30
60
90
10
16
14
3
2.5
5
30
40
70
Total 50 3.6 180 40 3.5 140
Solution Ans:
X Y Z Total
MYV/MSUV
MMV
+ 6
+ 4
+ 12
0
+ 18
− 12
+ 36
− 8
MQV/MUV
MPV
+ 10
− 10
+ 12
+ 8
+ 6
+ 14
+ 28
+ 12
MCV 0 + 20 + 20 + 40

# Problem 3

From the data give below, calculate materials variances.

Consumption for 120 units of production
Raw Materials Standard Actual
A
B
65 units @ 50 per unit
35 units @ 40 per unit
80 units @ 50 per unit
40 units @ 44 per unit
Solution Ans:
A B Total
MYV/MSUV
MMV
− 650
− 100
− 280
+ 80
− 930
− 20
MQV/MUV
MPV
− 750
0
− 200
− 160
− 950
− 160
MCV − 750 − 360 − 1,110

# 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
B
C
15
3
6
6
8
5
224
282
140
18
3
4
19 646
Solution Ans:
A B C Total
MYV/MSUV
MMV
+ 180
− 300
+ 48
− 30
+ 60
+ 180
+ 288
− 150
MQV/MUV
MPV
− 120
− 672
+ 18
0
+ 240
+ 280
+ 138
− 392
MCV − 792 + 18 + 520 − 254

# Problem 5

From the following details, calculate material variances

Standard Actual
Production in units
Materials per unit :
Max
Dax
2,000

4 kg @ 12/kg
2 Kg @ 6/kg
1,800

5.6 kg. @ 14/kg
2.8 kg. @ 5/kg
Solution Ans:
M D Total
MYV/MSUV
MMV
− 1,19,232
0
− 29,808
0
− 1,49,040
0
MQV/MUV
MPV
− 1,19,232
− 20,160
− 29,808
+ 5,040
− 1,49,040
− 15,120
MCV − 1,39,392 − 24,768 − 1,64,160

# 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
Actual Price Paid per Ton
Actual Weights
240
230
15 tons
320
308
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 Ans:
X Y Total
MYV/MSUV
MMV
+ 210.6
+ 495
+ 180
− 660
+ 390.6
− 165
MQV/MUV
MPV
+ 705.6
+ 150
− 480
+ 156
+ 225.6
+ 306
MCV + 855.6 − 324 + 531.6

# 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
Material II
3 kg
5 kg
4 per 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
II
1,600 kg
2,400 kg
6,880
7,440

Caluculate variances.

Solution Ans:
I II Total
MYV/MSUV
MMV
0
− 400
0
+ 300
0
− 100
MQV/MUV
MPV
− 400
− 480
+ 300
− 240
− 100
− 720
MCV − 880 + 60 − 820

# 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
Q
R
50
30
20
2
3
4
460
540
710
Total 100 1,710

Calculate Material mix sub-variance (MMSV)

Solution Ans:
P Q R Total
MYV/MSUV
MMV
− 1,610
+ 790
− 1,449
− 81
− 1,288
− 1,472
− 4,347
− 763
MQV/MUV − 820 − 1,530 − 2,760 − 5,110

# 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 Material Q 12 lts @ 12.50/ltr 18 lts @ 15.00/ltr 150 270

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 Ans:
P Q Total
MYV/MSUV
MMV
− 270
− 1,230
− 486
+ 1,476
− 756
+ 246
MQV/MUV − 1,500 + 990 − 510