# Problem 1

From the data given below, calculate.
 (a) Individual material price variances for the two materials X and Y assuming that price variances are calculated at the time of purchase; (b) Individual material usage variances for materials X and Y assuming that there was no work-in-progress either at the commencement or at the end of the period.

'X' 'Y'
Qty.
Kg.
Value
Qty.
Kg.
Value
Raw Material Purchase
Issues to works
Works stock of material : -
Opening
Closing
2,000
2,150

300
200
4,000

5,000
3,950

1,000
1,250
6,250

 Standard price:- Material X - 1.90 per kg. Material Y - 1.30 per kg.

Standard usage:-

Marterial X Marterial Y
Producti A 1 kg. 1 kg.
Producti B 0.5 kg. 1 kg.

Output during the period:-
Product A - 1,130 units
Product B - 2,550 units

Solution

# Problem 2

A brass foundry, making castings which are transferred to the machine shop of the same company at a standard prices, uses a standard costing system.
Basic standards with regard to materials, stock of which are kept at standard prices are as follows:

 Standard Mixture Standard Price Standard cost in melt 70% Copper 30% Zinc Copper 240 per tonne Zinc 65 per tonne 5% of input

Figures in respect of a costing period are as follows:

 Opening stocks Copper 100 tonnes Zinc 60 tonnes Closing stocks Copper 110 tonnes Zinc 50 tonnes
 Purchases-Copper Zinc 300 tonnes Cost 73,250 100 tonnes Cost 6,250 Material melted 400 tonnes Casting Produced 375 tones
Present figures showing all possible material variances.

Solution

# Problem 3

Adhrak Ltd. Produces an article by blending two basic materials. It operates a standard costing system and the following standards have been set for raw materials:
Material

Standard
Mix
Standard Price
per kg.
A 40% 4.00
B 60% 3.00

The standard loss in processing is 15%
During April 1995 the company produced 1,700 kgs.of finished output.
The position of stocks and purchases for the month of April 1995 is as under:

Material Stock on
1-4-95
Stock on
30-4-95
Purchased during
April 1995
Kgs. Kgs. Kgs. Costs ()
A 35 5 800 3,400
B 40 50 1,200 3,000

Calculate all the material variances.

Solution

# Practice Problems

Author : The Edifier