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80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance?
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80 kg of material A at standard price of 2 per kg and 40 kg of materia...
Solution:
Given data:
Standard price of material A = $2 per kg
Standard price of material B = $5 per kg
Quantity of material A used = 70 kg
Quantity of material B used = 50 kg
Actual output = 102 kg
Step 1: Calculating standard cost
The standard cost of producing 100 kg of chemical can be calculated as follows:
Standard cost of 80 kg of material A = 80 x $2 = $160
Standard cost of 40 kg of material B = 40 x $5 = $200
Total standard cost = $160 + $200 = $360
Therefore, the standard cost of producing 100 kg of the chemical is $360.
Step 2: Calculating actual cost
The actual cost of producing 102 kg of chemical can be calculated as follows:
Actual cost of 70 kg of material A = 70 x $2.10 = $147
Actual cost of 50 kg of material B = 50 x $4.50 = $225
Total actual cost = $147 + $225 = $372
Therefore, the actual cost of producing 102 kg of the chemical is $372.
Step 3: Calculating material cost variance
Material cost variance measures the difference between the actual cost and the standard cost of the materials used. It can be calculated as follows:
Material cost variance = Actual cost - Standard cost
= $372 - $360
= $12 (Favourable)
Therefore, the material cost variance is $12 (Favourable).
Step 4: Calculating material price variance
Material price variance measures the difference between the actual price paid for the materials and the standard price. It can be calculated as follows:
Material price variance = (Actual quantity x Actual price) - (Actual quantity x Standard price)
= (70 x $2.10) - (70 x $2) + (50 x $4.50) - (50 x $5)
= $147 - $140 + $225 - $250
= $-18 (Adverse)
Therefore, the material price variance is $-18 (Adverse).
Step 5: Calculating material usage variance
Material usage variance measures the difference between the actual quantity of materials used and the standard quantity allowed. It can be calculated as follows:
Material usage variance = (Actual quantity - Standard quantity) x Standard price
= (70 + 50 - 120) x $2
= $-20 (Adverse)
Therefore, the material usage variance is $-20 (Adverse).
Step 6: Calculating material mix variance
Material mix variance measures the difference between the actual proportion of materials used and the standard proportion. It can be calculated as follows:
Material mix variance = (Actual proportion - Standard proportion) x Total quantity x Standard price
= [(70/120) - (80/120)] x 120 x $2
= $-7 (Adverse)
Therefore, the material mix variance is $-7 (Adverse).
Step 7: Calculating material yield variance
Material yield variance measures the difference between the actual output and the standard output that should have been obtained from the materials used. It can be calculated as follows:
Material yield variance = Standard cost - (Actual quantity x Standard price)
= $360 - (102 x $3.6)
= $-4.8 (Adverse)
Therefore
Given data:
Standard price of material A = $2 per kg
Standard price of material B = $5 per kg
Quantity of material A used = 70 kg
Quantity of material B used = 50 kg
Actual output = 102 kg
Step 1: Calculating standard cost
The standard cost of producing 100 kg of chemical can be calculated as follows:
Standard cost of 80 kg of material A = 80 x $2 = $160
Standard cost of 40 kg of material B = 40 x $5 = $200
Total standard cost = $160 + $200 = $360
Therefore, the standard cost of producing 100 kg of the chemical is $360.
Step 2: Calculating actual cost
The actual cost of producing 102 kg of chemical can be calculated as follows:
Actual cost of 70 kg of material A = 70 x $2.10 = $147
Actual cost of 50 kg of material B = 50 x $4.50 = $225
Total actual cost = $147 + $225 = $372
Therefore, the actual cost of producing 102 kg of the chemical is $372.
Step 3: Calculating material cost variance
Material cost variance measures the difference between the actual cost and the standard cost of the materials used. It can be calculated as follows:
Material cost variance = Actual cost - Standard cost
= $372 - $360
= $12 (Favourable)
Therefore, the material cost variance is $12 (Favourable).
Step 4: Calculating material price variance
Material price variance measures the difference between the actual price paid for the materials and the standard price. It can be calculated as follows:
Material price variance = (Actual quantity x Actual price) - (Actual quantity x Standard price)
= (70 x $2.10) - (70 x $2) + (50 x $4.50) - (50 x $5)
= $147 - $140 + $225 - $250
= $-18 (Adverse)
Therefore, the material price variance is $-18 (Adverse).
Step 5: Calculating material usage variance
Material usage variance measures the difference between the actual quantity of materials used and the standard quantity allowed. It can be calculated as follows:
Material usage variance = (Actual quantity - Standard quantity) x Standard price
= (70 + 50 - 120) x $2
= $-20 (Adverse)
Therefore, the material usage variance is $-20 (Adverse).
Step 6: Calculating material mix variance
Material mix variance measures the difference between the actual proportion of materials used and the standard proportion. It can be calculated as follows:
Material mix variance = (Actual proportion - Standard proportion) x Total quantity x Standard price
= [(70/120) - (80/120)] x 120 x $2
= $-7 (Adverse)
Therefore, the material mix variance is $-7 (Adverse).
Step 7: Calculating material yield variance
Material yield variance measures the difference between the actual output and the standard output that should have been obtained from the materials used. It can be calculated as follows:
Material yield variance = Standard cost - (Actual quantity x Standard price)
= $360 - (102 x $3.6)
= $-4.8 (Adverse)
Therefore
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80 kg of material A at standard price of 2 per kg and 40 kg of materia...
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80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance?
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80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance?.
80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance?.
Solutions for 80 kg of material A at standard price of 2 per kg and 40 kg of material B at standard price of 5 per kg were to be used to manufacture 100 kg of a chemical. During a month, 70 kg of material A priced at 2-1 per kg and 50 kg of material B priced at P4-5 per kg were actually used and the output of the chemical was 102 kg. Find : (a) (b) Material cost variance Material price variance (c) Material usage variance (d) Material mixed variance (e) Material yield variance? in English & in Hindi are available as part of our courses for B Com.
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