Material Variances - Problems involving two or more Materials

Set 2

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
Materials	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
Material	Standard Price	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

Author : The Edifier

Set 4