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

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

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